UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM 10-K

(Mark One)

[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                   For the fiscal year ended December 31, 2003

                                       OR

[ ] TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR 15 (d)  OF THE  SECURITIES
    EXCHANGE ACT OF 1934

                        For the transition period from to

                         Commission file number 0-22485

                           CNL INCOME FUND XVII, LTD.
             (Exact name of registrant as specified in its charter)

          Florida                                           59-3295393
   (State or other jurisdiction of      (I.R.S. Employer Identification No.)
     incorporation or organization)

                             450 South Orange Avenue
                           Orlando, Florida 32801-3336
          (Address of principal executive offices, including zip code)

       Registrant's telephone number, including area code: (407) 540-2000

          Securities registered pursuant to Section 12 (b) of the Act:

       Title of each class:               Name of exchange on which registered:
            None                                   Not Applicable

           Securities registered pursuant to Section 12(g) of the Act:

              Units of limited partnership interest ($10 per Unit)
                                (Title of class)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934 during the preceding 12 months (or such shorter  period that the registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days: Yes X No ___

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. No [x]

         Indicate by check mark whether the registrant is an  accelerated  filer
(as defined in Exchange Act Rule 12b-2): Yes___ No X ---------

         Aggregate market value of the voting stock held by nonaffiliates of the
registrant:  The registrant registered an offering of 3,000,000 units of limited
partnership  interest  (the  "Units") on Form S-11 under the  Securities  Act of
1933, as amended. Since no established market for such Units exists, there is no
market value for such Units. Each Unit was originally sold at $10 per Unit.

                      DOCUMENTS INCORPORATED BY REFERENCE:
                                      None


<PAGE>


                                     PART I

Item 1.  Business

         CNL Income Fund XVII, Ltd. (the "Registrant" or the "Partnership") is a
limited  partnership  which was  organized  pursuant to the laws of the State of
Florida on February 10, 1995. The general partners of the Partnership are Robert
A.  Bourne,  James  M.  Seneff,  Jr.  and  CNL  Realty  Corporation,  a  Florida
corporation  (the  "General  Partners").  Beginning on  September  2, 1995,  the
Partnership offered for sale up to $30,000,000 of limited partnership  interests
(the  "Units")  (3,000,000  Units at $10 per Unit)  pursuant  to a  registration
statement on Form S-11 under the Securities  Act of 1933, as amended,  effective
August 11, 1995.  The offering  terminated  on September 19, 1996, at which date
the maximum  offering  proceeds of $30,000,000  had been received from investors
who  were  admitted  to  the  Partnership  as  limited  partners  (the  "Limited
Partners").

         The  Partnership  was organized to acquire both newly  constructed  and
existing  restaurant  properties,  as well as properties upon which  restaurants
were to be  constructed  (the  "Properties"),  which  are  leased  primarily  to
operators of national and regional  fast-food,  family-style  and casual  dining
restaurant  chains (the  "Restaurant  Chains").  Net proceeds to the Partnership
from its  offering of Units,  after  deduction  of  organizational  and offering
expenses, totalled $26,400,000 and were used as of December 31, 1998, to acquire
29 Properties,  pay  acquisition  fees  totalling  $1,350,000 and to establish a
working  capital reserve for Partnership  purposes.  The 29 Properties  included
four  Properties  owned  by  joint  ventures  in  which  the  Partnership  is  a
co-venturer and three  Properties  owned with affiliates of the General Partners
as tenants-in-common.

         As of December 31, 2000, the  Partnership  owned 28 Properties,  either
directly or indirectly through joint venture or tenancy in common  arrangements.
During the year ended  December 31, 2001,  the  Partnership  reinvested  the net
sales proceeds from the 2000 sale of the  Properties in Warner Robins,  Georgia,
and Long  Beach,  California  along  with a portion  of the net  sales  proceeds
received  from the 2001 sale of the  Property  in Houston,  Texas,  into a joint
venture arrangement,  CNL VII & XVII Lincoln Joint Venture, with an affiliate of
the General Partners to purchase and hold one property in Lincoln,  Nebraska. In
addition, during 2001, the Partnership sold its Properties in Kentwood, Missouri
and El Dorado,  California, and reinvested a portion of these net sales proceeds
in a Property  in Austin,  Texas,  and in a Property in  Waldorf,  Maryland,  as
tenants-in-common,  with  affiliates of the General  Partners.  During 2001, the
Partnership  distributed  to the  Limited  Partners,  a portion of the net sales
proceeds  received from the sale of the Property in Inglewood,  California and a
portion of the net sales  proceeds  received  from the sale of the  Property  in
Houston,  Texas.  During 2002, the Partnership  sold its Properties in Mesquite,
Nevada;  Knoxville,  Tennessee;  and  Wilmette,  Illinois,  and  reinvested  the
majority of the sales  proceeds in a Property in Houston  Texas; a joint venture
arrangement,  Katy Joint  Venture,  with an affiliate  of the General  Partners,
which  holds  one  Property  in  Katy,  Texas;  and in a  Property  in  Kenosha,
Wisconsin, as tenants-in-common, with an affiliate of the General Partners. Also
during  2002,  Mansfield  Joint  Venture,  in which the  Partnership  owns a 21%
interest, sold its Property in Mansfield, Texas and reinvested the proceeds in a
Property in Arlington, Texas. During 2003, the Partnership and its joint venture
partner  liquidated CNL Ocean Shores Joint Venture and the Partnership  received
its pro rata  share of the  liquidation  proceeds.  The  Partnership  intends to
reinvest  the  liquidation  proceeds  in an  additional  Property  and  also pay
liabilities of the Partnership.

         As of December 31, 2003, the  Partnership  owned 26 Properties.  The 26
Properties  include  four  Properties  owned by  joint  ventures  in  which  the
Partnership  is a  co-venturer  and six  Properties  owned  with  affiliates  as
tenants-in-common.   The  Partnership  generally  leases  the  Properties  on  a
triple-net  basis with the lessees  responsible for all repairs and maintenance,
property taxes, insurance and utilities.

         The  Partnership  holds  its  Properties  until  the  General  Partners
determine that the sale or other  disposition of the Properties is  advantageous
in view of the Partnership's investment objectives.  In deciding whether to sell
Properties,  the General  Partners  consider  factors such as potential  capital
appreciation,  net cash flow and federal income taxes. Certain lessees also have
been granted  options to purchase  Properties,  generally at the Property's then
fair market value after a specified  portion of the lease term has elapsed.  The
Partnership  has no  obligation  to sell all or any portion of a Property at any
particular  time,  except as may be required  under  property  purchase  options
granted to certain lessees.


<PAGE>


Leases

         Although there are variations in the specific terms of the leases,  the
following  is  a  summarized   description  of  the  general  structure  of  the
Partnership's  leases.  The leases of the  Properties  provide for initial terms
ranging from 10 to 20 years (the average being 18 years) and expire between 2011
and 2020. The majority of the leases are on a triple-net basis, with the lessees
responsible  for all repairs and  maintenance,  property  taxes,  insurance  and
utilities.  The leases of the Properties  provide for minimum base annual rental
payments (payable in monthly installments) ranging from approximately $63,000 to
$246,400. The majority of the leases provide for percentage rent, based on sales
in excess of a specified amount. In addition, the majority of the leases provide
that,  commencing in specified lease years (generally the sixth lease year), the
annual base rent required under the terms of the lease will increase.

         Generally,  the  leases  of the  Properties  provide  for  two to  four
successive five-year renewal options subject to the same terms and conditions as
the initial lease.  Lessees of 21 of the  Partnership's  26 Properties also have
been granted  options to purchase  Properties at the Property's then fair market
value after a specified portion of the lease term has elapsed. Fair market value
will be determined through an appraisal by an independent  appraisal firm. Under
the  terms  of  certain  leases,   the  option  purchase  price  may  equal  the
Partnership's  original  cost to purchase  the Property  (including  acquisition
costs),  plus a specified  percentage  from the date of the lease or a specified
percentage of the  Partnership's  purchase price, if that amount is greater than
the Property's fair market value at the time the purchase option is exercised.

         The leases generally provide that, in the event the Partnership  wishes
to sell the Property  subject to the terms of the lease,  the Partnership  first
must offer the lessee the right to purchase  the  Property on the same terms and
conditions,  and for the same  price,  as any offer  which the  Partnership  has
received for the sale of the Property.

         In December 2002, AmeriKing Corporation, the parent company to National
Restaurant Enterprises,  Inc., which was the tenant of the Properties in Harvey,
Lyons, and Chicago Ridge Illinois, filed for bankruptcy protection.  As a result
of the  bankruptcy,  the leases relating to the Properties in Harvey and Chicago
Ridge, Illinois were amended during 2003 to provide for a reduction in rents. In
December 2003, the leases relating to all three  Properties were assigned to and
assumed by a new tenant. As a result of the assignment and assumption, the rents
due under the leases  were  reduced.  The  Partnership  does not  believe  these
reduced rents will have a material  adverse  effect on the operating  results of
the Partnership.

Major Tenants

         During  the  year  ended  December  31,  2003,   four  lessees  of  the
Partnership,  Golden Corral Corporation,  National Restaurant Enterprises, Inc.,
Taco Cabana,  LP and Carrols  Corporation  (which are affiliated  entities under
common  control)  (hereinafter  referred  to as "Carrols  Corporation")  and RTM
Indianapolis,  Inc. and RTM Southwest Texas, Inc. (which are affiliated entities
under common control) (hereinafter referred to as "RTM, Inc."), each contributed
more than ten percent of the  Partnership's  total  rental  revenues  (including
total  rental  revenues  form the  Partnership's  share of  rental  income  from
Properties owned by joint ventures and Properties owned with separate affiliates
of the General Partners as  tenants-in-common).  As of December 31, 2003, Golden
Corral  Corporation  and Carrols  Corporation  were each the lessee under leases
relating to four restaurants, and RTM, Inc. was the lessee under leases relating
to  three  restaurants.  It is  anticipated  that  based on the  minimum  rental
payments required by the leases, Golden Corral Corporation,  Carrols Corporation
and RTM,  Inc.  each will  continue to  contribute  more than ten percent of the
Partnership's  total  rental  revenues in 2004.  In  addition,  four  Restaurant
Chains,  Golden Corral Buffet and Grill  ("Golden  Corral"),  Burger King,  Taco
Cabana and Arby's, each accounted for more than ten percent of the Partnership's
total rental revenues  during the year ended December 31, 2003 (including  total
rental  revenues from the  Partnership's  share of rental income from Properties
owned by joint  ventures and  Properties  owned with separate  affiliates of the
General Partners as tenants-in-common).  In 2004, it is anticipated that each of
these four  Restaurant  Chains will continue to contribute more than ten percent
of the Partnership's  total rental revenues to which the Partnership is entitled
under the terms of the leases. Any failure of these lessees or Restaurant Chains
will materially affect the Partnership's operating results if the Partnership is
not able to re-lease the Properties in a timely manner. As of December 31, 2003,
Golden Corral  Corporation leased Properties with an aggregate carrying value in
excess of 20% of the total assets of the Partnership.


Joint Venture and Tenancy in Common Arrangements

         The  partnership  has  entered  into the  following  joint  venture and
tenancy in common arrangements as of December 31, 2003:

<TABLE>

         Entity Name             Year      Ownership               Partners                   Property
<S>     <C>    <C>    <C>    <C>    <C>    <C>

CNL Income Fund XVI, Ltd and     1996       19.56%      CNL Income Fund XVI, Ltd.        Fayetteville, NC
     CNL Income Fund XVII,
     Ltd. Tenants in Common

CNL Income Fund XI, Ltd. and     1997       27.42%      CNL Income Fund XI, Ltd.         Corpus Christi, TX
     CNL Income Fund XVII,
     Ltd. Tenants in Common

CNL Income Fund XIII, Ltd.       1997       36.91%      CNL Income Fund XIII, Ltd.       Akron, OH
     and CNL Income Fund
     XVII, Ltd. Tenants in
     Common

CNL Mansfield Joint Venture      1997       21.00%      CNL Income Fund VII, Ltd.        Arlington, TX

CNL Kingston Joint Venture       1997       60.06%      CNL Income Fund XIV, Ltd.        Kingston, TN

CNL Income Fund IV, Ltd. and     1999       24.00%      CNL Income Fund IV, Ltd.         Zephyrhills, FL
     CNL Income Fund XVII,
     Ltd. Tenants in Common

CNL VII & XVII Lincoln Joint     2001       86.00%      CNL Income Fund VII, Ltd.        Lincoln, NE
     Venture

CNL Income Fund VI, Ltd., CNL    2001       25.00%      CNL Income Fund VI, Ltd.         Waldorf, MD
     Income Fund IX, Ltd. and                           CNL Income Fund IX, Ltd.
     CNL Income Fund XVII,
     Ltd. Tenants in Common

Katy  Joint Venture              2002       40.00%      CNL Income Fund IX, Ltd.         Katy, TX

CNL Income Fund VIII, Ltd.       2002       90.00%      CNL Income Fund VIII, Ltd.       Kenosha, WI
     and CNL Income Fund
     XVII, Ltd. Tenants in
     Common

</TABLE>

<PAGE>

         Each  joint  venture  or  tenancy  in  common  was  formed  to hold one
Property.  Each CNL Income Fund is an affiliate of the General Partners and is a
limited partnership  organized pursuant to the laws of the state of Florida. The
Partnership shares management control equally with the affiliates of the General
Partners.

         The joint  venture and tenancy in common  arrangements  provide for the
Partnership and its joint venture and tenancy in common partners to share in all
costs and benefits in proportion to each  partner's  percentage  interest in the
entity or  Property.  The  Partnership  and its  partners  are also  jointly and
severally liable for all debts,  obligations and other  liabilities of the joint
venture or tenancy in common.  Net cash flow from  operations is  distributed to
each  joint  venture  or  tenancy  in  common  partner  in  accordance  with its
respective percentage interest in the entity or Property.

         CNL VII and XVII Lincoln Joint Venture and Katy Joint Venture, each has
an initial term of 30 years, and each of the other joint ventures has an initial
term of 20 years.  After the  expiration  the initial  term,  each  continues in
existence  from year to year  unless  terminated  at the option of either  joint
venturer  or by an event of  dissolution.  Events  of  dissolution  include  the
bankruptcy,  insolvency  or  termination  of any  joint  venturer,  sale  of the
Property owned by the joint venture and mutual  agreement of the Partnership and
its joint  venture  partners  to dissolve  the joint  venture.  Any  liquidation
proceeds,  after paying joint venture debts and liabilities and funding reserves
for  contingent  liabilities,  will be  distributed  first to the joint  venture
partners with positive  capital account  balances in proportion to such balances
until such  balances  equal zero,  and  thereafter  in  proportion to each joint
venture partner's percentage interest in the joint venture.

         The joint  venture  and  tenancy  in common  agreements  restrict  each
party's ability to sell,  transfer or assign its interest without first offering
it for sale to its partners,  either upon such terms and  conditions as to which
the  parties may agree or, in the event the parties  cannot  agree,  on the same
terms and  conditions  as any offer from a third  party to  purchase  such joint
venture or tenancy in common interest.

         During 2003, CNL Ocean Shores Joint Venture,  in which the  Partnership
owned a 30.94%  interest,  sold its Property in Ocean  Shores,  Washington  to a
third party and the joint venture was liquidated.  The Partnership  received its
pro rata share of the liquidation proceeds.

         The use of joint venture and tenancy in common  arrangements allows the
Partnership  to fully invest its available  funds at times at which it would not
have  sufficient  funds to purchase an additional  property,  or at times when a
suitable  opportunity to purchase an additional  property is not available.  The
use of joint  venture  and  tenancy in common  arrangements  also  provides  the
Partnership  with  increased  diversification  of its portfolio  among a greater
number of properties. In addition,  tenancy in common arrangements may allow the
Partnership  to defer the gain for federal  income tax purposes upon the sale of
the property if the proceeds are reinvested in an additional property.

Certain Management Services

         RAI  Restaurants,  Inc.  (the  "Advisor"),  an affiliate of the General
Partners,  provides certain  services  relating to management of the Partnership
and its  Properties  pursuant to a management  agreement  with the  Partnership.
Under this agreement, the Advisor is responsible for collecting rental payments,
inspecting  the  Properties  and the tenants'  books and records,  assisting the
Partnership  in  responding  to tenant  inquiries  and  notices,  and  providing
information  to  the  Partnership  about  the  status  of  the  leases  and  the
Properties.  The Advisor also assists the General  Partners in  negotiating  the
leases.  For these  services,  the  Partnership has agreed to pay the Advisor an
annual fee of one percent of the sum of gross rental  revenues  from  Properties
wholly owned by the Partnership plus the Partnership's  allocable share of gross
revenues of joint ventures in which the Partnership is a co-venturer, but not in
excess of competitive fees for comparable services.

         The management agreement continues until the Partnership no longer owns
an interest in any Properties unless terminated at an earlier date upon 60 days'
prior notice by either party.

         During 2003,  CNL Capital  Management,  Inc.,  ("CCM"),  a wholly owned
subsidiary of CNL Financial  Group,  Inc.,  began  providing  certain  strategic
advisory  services  to  the  General  Partners  relative  to  the  Partnership's
business. CCM is not reimbursed for these services by the Partnership.  CCM also
began  providing  some  accounting  and  portfolio  management  services  to the
Partnership during 2003, through a subcontract with the Advisor.

Competition

         The fast-food and family-style  restaurant business is characterized by
intense  competition.  The restaurants on the Partnership's  Properties  compete
with  independently  owned  restaurants,  restaurants which are part of local or
regional chains, and restaurants in other well-known national chains,  including
those offering different types of food and service.



<PAGE>


Employees

         The  Partnership   has  no  employees.   The  officers  of  CNL  Realty
Corporation,  the officers  and  employees of CNL  Restaurant  Properties,  Inc.
(formerly  CNL  American  Properties  Fund,  Inc.),  the  parent  company of the
Advisor,  and the officers and employees of CCM perform certain services for the
Partnership.  In  addition,  the General  Partners  have  available  to them the
resources and  expertise of the officers and  employees of CNL Financial  Group,
Inc.,  a  diversified  real estate  company,  and its  affiliates,  who may also
perform certain services for the Partnership.


Item 2.  Properties

         As of December 31, 2003, the Partnership owned 26 Properties. Of the 26
Properties,  16 are  owned by the  Partnership  in fee  simple,  four are  owned
through joint venture  arrangements  and six are owned through tenancy in common
arrangements.  See Item 1.  Business  - Joint  Venture  and  Tenancy  in  Common
Arrangements.  The Partnership is not permitted to encumber its Properties under
the terms of its partnership agreement.

Description of Properties

         Land. The Partnership's  Property sites, owned directly and indirectly,
range from  approximately  23,500 to 115,100 square feet depending upon building
size and local  demographic  factors.  Sites purchased by the Partnership are in
locations zoned for commercial use which have been reviewed for traffic patterns
and volume.

         The  following  table lists the  Properties  owned by the  Partnership,
directly and indirectly, as of December 31, 2003 by state.

               State                           Number of Properties

               California                                1
               Florida                                   3
               Georgia                                   1
               Illinois                                  3
               Indiana                                   2
               Maryland                                  1
               Nebraska                                  1
               North Carolina                            1
               Ohio                                      1
               South Carolina                            1
               Tennessee                                 2
               Texas                                     8
               Wisconsin                                 1
                                                   --------------
               TOTAL PROPERTIES                         26
                                                   ==============

         Buildings.  Each of the Properties includes a building that is one of a
Restaurant Chain's approved designs. The buildings generally are rectangular and
are constructed  from various  combinations of stucco,  steel,  wood,  brick and
tile.  The  sizes  of  the  buildings  owned  by  the  Partnership  ranged  from
approximately  2,100 to 11,300 square feet. All buildings on Properties acquired
by the  Partnership  are  freestanding  and  surrounded by paved parking  areas.
Buildings are suitable for  conversion to various uses,  although  modifications
may be  required  prior  to use for  other  than  restaurant  operations.  As of
December  31,  2003,  the  Partnership  had  no  plans  for  renovation  of  the
Properties.  Depreciation  expense is computed for  buildings  and  improvements
using the straight line method using a depreciable  life of 40 years for federal
income tax purposes.

         As of December 31, 2003, the aggregate cost of the Properties  owned by
the Partnership and joint ventures  (including  Properties owned through tenancy
in common  arrangements)  for federal  income tax purposes was  $17,341,796  and
$12,245,448, respectively.

         The  following  table lists the  Properties  owned by the  Partnership,
directly and indirectly, as of December 31, 2003 by Restaurant Chain.

                Restaurant Chain                Number of Properties

                Arby's                                    4
                Bennigan's                                1
                Black-eyed Pea                            1
                Boston Market                             1
                Burger King                               4
                Denny's                                   1
                Fazoli's                                  1
                Golden Corral                             4
                Jack in the Box                           3
                Taco Bell                                 1
                Taco Cabana                               3
                Texas Roadhouse                           1
                Wendy's                                   1
                                                    --------------
                TOTAL PROPERTIES                         26
                                                    ==============

         The General Partners consider the Properties to be well-maintained  and
sufficient for the Partnership's operations.

         The General Partners believe that the Properties are adequately covered
by  insurance.  In  addition,  the General  Partners  have  obtained  contingent
liability and property coverage for the Partnership.  This insurance is intended
to reduce the Partnership's  exposure in the unlikely event a tenant's insurance
policy lapses or is insufficient to cover a claim relating to the Property.

         Leases.   The  Partnership   leases  the  Properties  to  operators  of
Restaurant  Chains.  The leases are generally on a long-term "triple net" basis,
meaning that the tenant is responsible for repairs, maintenance, property taxes,
utilities and insurance.

         The  following  is a schedule  of the  average  rent per  Property  and
occupancy rate for the years ended December 31:
<TABLE>

                                       2003              2002              2001             2000              1999
                                   --------------    -------------     -------------    -------------     --------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Rental income(1)(2)                  $ 2,388,965      $ 2,359,096       $ 2,357,917      $ 2,353,394         $2,667,611
Properties(2)                                 26               27                26               26                 29
Average rent per property              $  91,883        $  87,374         $  90,689        $  90,515          $  91,987
Occupancy rate                               96%             100%               96%              92%                93%
</TABLE>

     (1) Rental revenues include the Partnership's share of rental revenues from
         the  Properties  owned  through  joint  venture  and  tenancy in common
         arrangements.

     (2) Excludes  Properties  that were  vacant  at  December  31,  and did not
         generate rental revenues during the year ended December 31.



<PAGE>


         The following is a schedule of lease expirations for leases in place as
of December 31, 2003 for each year for the next ten years and thereafter.
<TABLE>

                                                                                     Percentage of
             Expiration Year          Number              Annual Rental              Gross Annual
                                     of Leases               Revenues                Rental Income
             -----------------    ----------------       -----------------     --------------------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

              2004                             --                       --                      --
              2005                             --                       --                      --
              2006                             --                       --                      --
              2007                             --                       --                      --
              2008                             --                       --                      --
              2009                             --                       --                      --
              2010                             --                       --                      --
              2011                              3                  438,398                  18.07%
              2012                              1                   24,043                   0.99%
              2013                             --                       --                      --
              Thereafter                       22                2,027,301                  80.94%
                                        ----------       ------------------           -------------
              Total                            26             $  2,489,742                 100.00%
                                        ==========       ==================           =============
</TABLE>


         Leases  with Major  Tenants.  The terms of each of the leases  with the
Partnership's  major  tenants as of December  31,  2003 (see Item 1.  Business -
Major  Tenants),  are  substantially  the  same as  those  described  in Item 1.
Business - Leases.

         Golden Corral  Corporation leases four Golden Corral  restaurants.  The
initial  term of each lease is 15 years (three  leases  expiring in 2011 and one
lease in  2015)  and the  average  minimum  base  annual  rent is  approximately
$156,200 (ranging from approximately $107,600 to $190,000).

         National  Restaurant   Enterprises,   Inc.  leased  three  Burger  King
restaurants.  The initial term of each lease was 20 years (expiring between 2016
and 2017) and the average  minimum base annual rent was  approximately  $140,400
(ranging from  approximately  $123,200 to  $153,600).  In December  2003,  these
leases were assigned to and assumed by Heartland Illinois Food Corp.

         Carrols Corporation leases three Taco Cabana restaurants and one Burger
King  restaurant.  The  initial  term of each  lease  is  either  19 or 20 years
(expiring  between  2016 and 2020) and the average  minimum  base annual rent is
approximately $114,400 (ranging from $94,200 to $140,300).

         RTM,  Inc.  leases three Arby's  restaurants.  The initial term of each
lease is 20 years (expiring in 2016) and the average minimum base annual rent is
approximately $89,300 (ranging from approximately $86,100 to $91,900).


Item 3.  Legal Proceedings

         Neither the Partnership, nor its General Partners, nor any affiliate of
the Partnership, nor any of their respective Properties, is party to, or subject
to, any material pending legal proceedings.


Item 4.  Submission of Matters to a Vote of Security Holders

         Not applicable.



<PAGE>


                                     PART II


Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

(a)      As of March 12, 2004,  there were 1,640 holders of record of the Units.
There is no public trading market for the Units,  and it is not anticipated that
a public market for the Units will develop.  During 2003,  Limited  Partners who
wished to sell their Units may have  offered the Units for sale  pursuant to the
Partnership's  distribution reinvestment plan (the "Plan"), and Limited Partners
who wished to have their  distributions used to acquire additional Units (to the
extent Units were  available  for  purchase),  may have done so pursuant to such
Plan. The General Partners have the right to prohibit  transfers of Units.  From
inception  through  December 31, 2003,  the price paid for any Unit  transferred
pursuant to the Plan ranged from $9.14 to $9.50 per Unit. The price paid for any
Unit  transferred  other than pursuant to the Plan was subject to negotiation by
the purchaser and the selling Limited  Partner.  The Partnership will not redeem
or repurchase Units.

         The following table reflects,  for each calendar quarter, the high, low
and average sales prices for transfers of Units during 2003 and 2002, other than
pursuant to the Plan, net of commissions.

<TABLE>
                                               2003                                         2002
                               ---------- -- ---------- -- -----------       -------- --- ---------- --- -----------
                                  High           Low         Average           High           Low          Average
                               ----------    ----------    -----------       --------     ----------     -----------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

        First Quarter                 (2)           (2)            (2)          $7.00         $ 6.00         $  6.67
        Second Quarter             $ 8.18        $ 7.18        $  7.78           7.50           6.75            7.13
        Third Quarter                8.05          7.42           7.84           7.35           6.57            7.12
        Fourth Quarter               6.79          6.79           6.79           9.30           6.84            8.07
</TABLE>

(1)     A total of 10,400 and 11,400 Units were transferred other than pursuant
        to  the  Plan  for  the  years  ended   December  31,  2003  and  2002,
        respectively.

(2)     No transfer of Units took place during the quarter  other than pursuant
        to the Plan.

        The  capital  contribution  per Unit was $10.  All cash  available  for
distribution  will be distributed to the partners  pursuant to the provisions of
the Partnership Agreement.

         For each of the years ended December 31, 2003 and 2002, the Partnership
declared cash distributions of $2,400,000 to the Limited Partners. Distributions
of $600,000  were  declared at the close of each of the  Partnership's  calendar
quarters  during 2003 and 2002 to the Limited  Partners.  These amounts  include
monthly  distributions  made in arrears  for the  Limited  Partners  electing to
receive such distributions on this basis. No amounts distributed to partners for
the years  ended  December  31, 2003 and 2002,  are  required to be or have been
treated by the  Partnership  as a return of capital for purposes of  calculating
the  Limited  Partners'  return  on their  adjusted  capital  contributions.  No
distributions have been made to the General Partners to date.

         The  Partnership  intends to  continue  to make  distributions  of cash
available  for  distribution  to the  Limited  Partners  on a  quarterly  basis,
although some Limited  Partners,  in  accordance  with their  election,  receive
monthly distributions for an annual fee.

(b) Not applicable.



<PAGE>


Item 6.  Selected Financial Data
<TABLE>

 Year ended December 31:                     2003            2002            2001            2000            1999
                                         --------------  --------------  --------------  -------------   -------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

 Continuing Operations (2):
       Revenues                            $ 1,697,355      $1,716,737      $1,698,351     $1,859,942      $2,368,007
       Equity in earnings (loss) of
          unconsolidated joint
          ventures                             645,804         543,978        (136,021 )      176,088         182,132
       Income from continuing
          operations (1)                     1,791,674       1,256,056       1,189,757        326,285       1,544,896

 Discontinued Operations (2):
       Revenues                                 46,820         225,350         323,045        435,849         324,756
       Income (loss) from and gain
          on disposal of discontinued
          operations (3)                      (184,260 )       470,056        (220,561 )      346,853         294,373

 Net income                                  1,607,414       1,726,112         969,196        673,138       1,839,269

 Income (loss) per Unit:
       Continuing operations                 $    0.60        $   0.42        $   0.40       $   0.11        $   0.51
       Discontinued operations                   (0.06 )          0.16           (0.08 )         0.11            0.10
                                         --------------  --------------  --------------  -------------   -------------
                                             $    0.54        $   0.58        $   0.32       $   0.22        $   0.61
                                         ==============  ==============  ==============  =============   =============

 Cash distributions declared                $2,400,000      $2,400,000      $2,400,000     $2,400,000      $2,400,000
 Cash distributions declared per
     unit                                         0.80            0.80            0.80           0.80            0.80

 At December 31:
     Total assets                          $21,781,634     $22,563,535     $23,194,348    $24,675,610     $26,561,963
     Partners' capital                      21,045,490      21,838,076      22,511,964     23,942,768      25,669,630

</TABLE>

     (1) Income from continuing operation for the years ended December 31, 2002,
         2001, 2000 and 1999 includes $456,000, $39,576, $1,079,275 and $232,140
         from  provisions  for write-down of assets,  respectively,  and for the
         years ended  December  31,  2001 and 2000,  it  includes  $310,979  and
         $17,447  from  gain  on  sale  of  assets,  respectively.  Income  from
         continuing  operations  for the year ended  December 31, 1999  includes
         $82,914 from loss on dissolution of joint venture.

     (2) Certain  items in the  prior  years'  financial  statements  have  been
         reclassified to conform to 2003 presentation.  These  reclassifications
         had no effect on net  income.  The  results of  operations  relating to
         Properties  that  were  either  identified  for  sale and  disposed  of
         subsequent to January 1, 2002 or were classified as held for sale as of
         December 31, 2003 are reported as discontinued operations.  The results
         of operations  relating to properties  that were identified for sale as
         of December 31, 2001 but sold  subsequently  are reported as continuing
         operations.

     (3) Income (loss) from and gain on disposal of discontinued  operations for
         the years ended  December 31, 2003,  2001 and 2000  includes  $213,000,
         $465,915  and  $28,644  from   provisions  for  write-down  of  assets,
         respectively,  and for the year ended  December 31,  2002,  it includes
         $285,677 from gain on disposal of discontinued operations.

         The above selected  financial  data should be read in conjunction  with
the financial statements and related notes contained in Item 8 hereof.


<PAGE>


Item 7. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations

         The  Partnership  was  organized on February  10, 1995,  to acquire for
cash,  either  directly  or  through  joint  venture  arrangements,  both  newly
constructed  and  existing  restaurant  Properties,  as well as land upon  which
restaurant  Properties  were to be  constructed,  which are leased  primarily to
operators of Restaurant Chains. The leases are generally triple-net leases, with
the lessees  generally  responsible  for all repairs and  maintenance,  property
taxes,  insurance  and  utilities.  The leases  provide for minimum  base annual
rental  amounts  (payable in monthly  installments)  ranging from  approximately
$63,000 to $246,400.  The majority of the leases  provide for  percentage  rent,
based on sales in excess of a specified amount. In addition,  some of the leases
provide that,  commencing in specified  lease years  (generally  the sixth lease
year), the annual base rent required under the terms of the lease will increase.

         As of December 31, 2003, 2002, and 2001, the Partnership  owned 16, 16,
and 18 Properties  directly,  respectively.  In addition,  the Partnership owned
ten, eleven, and nine Properties  indirectly through joint venture or tenancy in
common arrangements as of December 31, 2003, 2002, and 2001, respectively.

Capital Resources

         For the years  ended  December  31,  2003,  2002,  and 2001,  cash from
operating  activities was $2,143,557,  $2,259,664 and $1,784,443,  respectively.
The decrease in cash from  operating  activities  during the year ended December
31,  2003,  as  compared  to  2002,  and the  increase  in cash  from  operating
activities  during  2002,  as compared  to 2001,  was a result of changes in the
Partnership's  working capital,  such as the timing of transactions  relating to
the collection of receivables and the payment of expenses, and changes in income
and  expenses,  such as changes in rental  revenues and changes in operating and
Property related expenses.

         Other sources and uses of cash included the following  during the years
ended December 31, 2003, 2002, and 2001.

         In January 2001, the Partnership sold its Property in Houston, Texas to
a third  party  and  received  net sales  proceeds  of  approximately  $782,700,
resulting in a gain of $4,284.  The  Partnership  used the net sales proceeds to
acquire an  interest  in CNL VII and XVII  Lincoln  Joint  Venture,  and to make
distributions to the Limited  Partners.  CNL VII and XVII Lincoln Joint Venture,
is a joint  venture with CNL Income Fund VII,  Ltd., an affiliate of the General
Partners.  The joint venture holds one Property.  The Property was acquired from
CNL BB Corp.,  an  affiliate  of the General  Partners,  who had  purchased  and
temporarily held title to the Property in order to facilitate the acquisition of
the Property by the joint venture.  In April 2001, the  Partnership  contributed
approximately  $1,496,700  to the joint  venture,  which  included the net sales
proceeds  from the sales of Properties in Warner  Robins,  Georgia,  Long Beach,
California,  and Houston,  Texas.  The  Partnership  owns an 86% interest in the
profits and losses of the joint venture.

         In June 2001, the Partnership sold the Property in Kentwood,  Michigan,
received  net sales  proceeds of  approximately  $681,200 and recorded a loss of
$38,877.  In July  2001,  the  Partnership  used a  portion  of these  net sales
proceeds  to  acquire  an  interest  in a  Property  in  Waldorf,  Maryland,  as
tenants-in-common  with CNL Income Fund VI, Ltd.  and CNL Income Fund IX,  Ltd.,
each  of  which  is an  affiliate  of  the  General  Partners.  The  Partnership
contributed  approximately $570,100 for a 25% interest in the profits and losses
of the Property.

         In September  2001,  the  Partnership  sold the Property in  Inglewood,
California  to a third party for $300,000  and  received  net sales  proceeds of
approximately  $298,300.  Since the  Partnership  had  recorded a provision  for
write-down of this Property in 2001, no additional  gain or loss was  recognized
on the sale. The Partnership  used the majority of the net sales proceeds to pay
liabilities of the Partnership.

         In September 2001, the Partnership also sold its Property in El Dorado,
California  to a third party and  received net sales  proceeds of  approximately
$1,510,500,  resulting in a gain of $345,572.  In December 2001, the Partnership
reinvested the majority of net sales proceeds  received in a Property in Austin,
Texas.  The  Partnership  acquired the Property from an affiliate of the General
Partners. The affiliate had purchased and temporarily held title to the Property
in order to facilitate the acquisition of the Property by the  Partnership.  The
purchase price paid by the Partnership of approximately  $1,216,600  represented
the costs incurred by the affiliate to acquire the Property. The transaction, or
a portion thereof,  relating to the sale of the Property and the reinvestment of
the proceeds  qualified as a like-kind  exchange  transaction for federal income
tax purposes.  The  Partnership  used the  remaining  net sales  proceeds to pay
liabilities of the Partnership.


<PAGE>


         In March 2002, the Partnership  sold its Denny's  Property in Mesquite,
Nevada,  to a third  party and  received  net sales  proceeds  of  approximately
$771,800. Since the Partnership had recorded provisions for write-down of assets
in  prior  years  for this  Property,  no gain or loss  was  recognized  in 2002
relating to the sale.  The  provision  represented  the  difference  between the
carrying value of the Property and its estimated fair value.

         In May and June 2002, the Partnership sold its Properties in Knoxville,
Tennessee and Wilmette,  Illinois to third parties and received  total net sales
proceeds of approximately  $2,727,800 resulting in a total gain of approximately
$285,700.

         In June 2002, the Partnership  reinvested the majority of the net sales
proceeds,  it received from the sale of the  Properties in Mesquite,  Nevada and
Knoxville, Tennessee, in a Taco Cabana Property located in Houston, Texas, at an
approximate cost of approximately $1,364,200.

         In addition in June 2002, the  Partnership  reinvested a portion of the
net sales proceeds from the sale of the Property in Mesquite,  Nevada in a joint
venture  arrangement,  Katy Joint  Venture,  with CNL Income  Fund IX,  Ltd.,  a
Florida limited partnership and an affiliate of the General Partners.  The joint
venture  acquired  a  Property  in  Katy,  Texas.  The  Partnership  contributed
approximately $416,700 for a 40% interest in the profits and losses of the joint
venture.

         The  Partnership  and Katy Joint  Venture  acquired the  Properties  in
Houston and Katy,  Texas from CNL Funding  2001-A,  LP, and an  affiliate of the
General  Partners.  CNL Funding 2001-A,  LP had purchased and  temporarily  held
title to the Properties in order to facilitate the acquisition of the Properties
by the  Partnership  and the joint  venture.  The  purchase  prices  paid by the
Partnership and the joint venture  represented the costs incurred by CNL Funding
2001-A, LP to acquire and carry the Properties.

         In August 2002, the Partnership  reinvested the net sales proceeds from
the sale of the  Property  in  Wilmette,  Illinois  in a  Property  in  Kenosha,
Wisconsin as tenants-in-common with CNL Income Fund VIII, Ltd. ("CNL VIII"), and
an affiliate of the General Partners, at an approximate cost of $1,883,000.  The
Partnership  contributed  approximately  $1,694,700  for a 90%  interest in this
Property.  The  General  Partners  believe  that the  transactions,  or  portion
thereof,  relating to the sale of the Property and the  reinvestment  of the net
sales  proceeds,  or a portion  thereof,  will  qualify as a like-kind  exchange
transaction for federal income tax purposes.

         In August 2002,  Mansfield Joint Venture, in which the Partnership owns
a 21% interest, sold its Property in Mansfield, Texas to the tenant and received
net  sales  proceeds  of  approximately   $1,011,500  resulting  in  a  gain  of
approximately $269,800. The joint venture used the proceeds from the sale of the
Property and additional  contributions  from the Partnership and CNL Income Fund
VII, Ltd., who are the general  partners of the joint venture,  of approximately
$17,000 and $63,900,  respectively,  to acquire a Property in  Arlington,  Texas
from  CNL  Net  Lease  Investors,  L.P.  ("NLI"),  at  an  approximate  cost  of
$1,089,900.  During 2002, and prior to the joint  venture's  acquisition of this
Property,  CNL Financial LP Holding, LP ("CFN"), a Delaware limited partnership,
and CNL Net Lease  Investors  GP Corp.  ("GP  Corp"),  a  Delaware  corporation,
purchased  the  limited  partner's  interest  and  general  partner's  interest,
respectively,   of  NLI.  Prior  to  this  transaction,   an  affiliate  of  the
Partnership's  General  Partners  owned a 0.1%  interest  in NLI and served as a
general partner of NLI. The original general partners of NLI waived their rights
to benefit  from this  transaction.  The  acquisition  price paid by CFN for the
limited  partner's  interest was based on the portfolio  acquisition  price. The
joint venture  acquired the Property in  Arlington,  Texas at CFN's cost and did
not pay any additional  compensation to CFN for the acquisition of the Property.
Each CNL entity is an affiliate of the Partnership's General Partners.

         In  September  2003,  CNL  Ocean  Shores  Joint  Venture,  in which the
Partnership  owned a 30.94%  interest,  sold its  property  to a third party for
$824,600  resulting  in a gain  of  approximately  $413,700.  As a  result,  the
Partnership received  approximately  $242,800 representing its pro-rata share of
the  liquidation  proceeds.  CNL Ocean  Shores  Joint  Venture was  dissolved in
accordance  with the joint venture  agreement and no gain or loss was recognized
on the  dissolution.  The General  Partners  intend to reinvest the  liquidation
proceeds in an additional property and pay liabilities of the Partnership.

         None of the Properties owned by the Partnership,  or the joint ventures
or tenancy in common arrangements in which the Partnership owns an interest,  is
or may be encumbered. Subject to certain restrictions on borrowing, however, the
Partnership  may borrow  funds but will not encumber  any of the  Properties  in
connection  with any such  borrowing.  The  Partnership  will not borrow for the
purpose of returning capital to the Limited  Partners.  The Partnership will not
borrow  under  arrangements  that  would  make the  Limited  Partners  liable to
creditors of the Partnership. The General Partners further have represented that
they will use their  reasonable  efforts to structure  any  borrowing so that it
will not constitute  "acquisition  indebtedness" for federal income tax purposes
and also will limit the Partnership's  outstanding indebtedness to three percent
of the  aggregate  adjusted  tax  basis  of its  Properties.  In  addition,  the
Partnership  will not borrow  unless it first obtains an opinion of counsel that
such borrowing will not constitute acquisition  indebtedness.  Affiliates of the
General Partners from time to time incur certain operating expenses on behalf of
the  Partnership  for which the  Partnership  reimburses the affiliates  without
interest.

         At December 31, 2003, the Partnership had $816,092 invested in cash and
cash  equivalents  as compared to $829,739 at December 31, 2002. At December 31,
2003,  these  funds were held in demand  deposit  and money  market  accounts at
commercial  banks. As of December 31, 2003, the average  interest rate earned on
rental  income held in demand  deposit and money market  accounts at  commercial
banks was less than one percent  annually.  The funds  remaining at December 31,
2003,  after payment of  distributions  and other  liabilities,  will be used to
invest in an additional  property and to meet the Partnership's  working capital
needs.

Short-Term Liquidity

         The Partnership's  investment strategy of acquiring Properties for cash
and  leasing  them under  triple-net  leases to  operators  who  generally  meet
specified financial  standards  minimizes the Partnership's  operating expenses.
The General  Partners believe that the leases will continue to generate net cash
flow in excess of operating expenses.

         The Partnership's  short-term liquidity  requirements consist primarily
of the operating expenses of the Partnership.

         The General  Partners have the right,  but not the obligation,  to make
additional capital  contributions if they deem it appropriate in connection with
the operations of the Partnership.

         Due to low  operating  expenses  and  ongoing  cash flow,  the  General
Partners do not believe that  working  capital  reserves  are  necessary at this
time. In addition,  because generally all leases of the Partnership's Properties
are on a triple-net  basis, it is not anticipated  that a permanent  reserve for
maintenance and repairs is necessary at this time. To the extent,  however, that
the Partnership has insufficient  funds for such purposes,  the General Partners
will contribute to the  Partnership an aggregate  amount of up to one percent of
the offering proceeds for maintenance and repairs. The General Partners have the
right to cause the  Partnership  to maintain  reserves if, in their  discretion,
they  determine  such  reserves are required to meet the  Partnership's  working
capital needs.

         The Partnership  generally  distributes cash from operations  remaining
after the payment of the operating  expenses of the  Partnership,  to the extent
that  the  General  Partners   determine  that  such  funds  are  available  for
distribution.  Based on current and future cash from operating  activities,  the
Partnership  declared  distributions  to the Limited  Partners of $2,400,000 for
each of the years.  This represents  distributions of $0.80 per Unit for each of
the years ended December 31, 2003, 2001 and 2001. No distributions  were made to
the General  Partners for the years ended  December 31, 2003,  2002 and 2001. No
amounts  distributed  to the Limited  Partners for the years ended  December 31,
2003,  2002 and 2001 are required to be or have been treated by the  Partnership
as a return of capital for purposes of calculating the Limited  Partners' return
on their adjusted capital contributions.  The Partnership intends to continue to
make  distributions  of cash available for distribution to Limited Partners on a
quarterly basis.

         During 2000, the General  Partners waived their right to receive future
distributions  from the Partnership,  including both  distributions of operating
cash flow and  distributions  of  liquidation  proceeds,  to the extent that the
cumulative amount of such distributions  would exceed the balance in the General
Partners'  capital  account as of December  31, 1999.  Accordingly,  the General
Partners were not allocated any net income and did not receive any distributions
during the years ended December 31, 2003, 2002 and 2001.

         As of December  31, 2003 and 2002,  the  Partnership  owed  $11,242 and
$26,600,  respectively,  to  affiliates  of the General  Partners for  operating
expenses,  accounting and  administrative  services,  and management fees. As of
March 12, 2004, the Partnership had reimbursed the affiliates for these amounts.
Other liabilities,  including  distributions  payable,  increased to $724,902 at
December 31, 2003,  from  $698,859 at December  31, 2002.  The General  Partners
believe that the  Partnership  has  sufficient  cash on hand to meet its current
working capital needs.


<PAGE>


Off-Balance Sheet Transactions

         The Partnership holds interests in various unconsolidated joint venture
and  tenancy  in common  arrangements  that are  accounted  for using the equity
method.  The  General  Partners  do not  believe  that any such  interest  would
constitute an off-balance sheet arrangement requiring any additional disclosures
under the provisions of the Sarbanes-Oxley Act of 2002.

Contractual Obligations, Contingent Liabilities, and Commitments

         The Partnership has no contractual obligations, contingent liabilities,
or commitments as of December 31, 2003.

Long-Term Liquidity

         The  Partnership  has no long-term  debt or other  long-term  liquidity
requirements.

Critical Accounting Policies

         The  Partnership's  leases are  accounted  for under the  provisions of
Statement of Financial  Accounting  Standards  No. 13,  "Accounting  for Leases"
("FAS 13"), and have been accounted for using either the direct financing or the
operating  method.  FAS 13 requires  management to estimate the economic life of
the leased  property,  the residual value of the leased property and the present
value of minimum  lease  payments to be received  from the tenant.  In addition,
management  assumes  that all  payments  to be  received  under its  leases  are
collectible.   Changes  in  management's   estimates  or  assumptions  regarding
collectibility  of lease payments could result in a change in accounting for the
lease.

         The Partnership  accounts for its  unconsolidated  joint ventures using
the equity method of accounting. Under generally accepted accounting principles,
the equity method of accounting is  appropriate  for entities that are partially
owned by the  Partnership,  but for which  operations of the investee are shared
with other partners.  The  Partnership's  joint venture  agreements  require the
consent of all partners on all key  decisions  affecting  the  operations of the
underlying Property.

         Management  reviews the  Partnership's  Properties  and  investments in
unconsolidated  entities  periodically  for  impairment  at least once a year or
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable.  The assessment is based on the carrying amount
of the  Property  or  investment  at the date it is  tested  for  recoverability
compared to the sum of the estimated  future cash flows  expected to result from
its operation and sale through the expected holding period.  If an impairment is
indicated, the asset is adjusted to its estimated fair value.

         Effective  January  1,  2002,  the  Partnership  adopted  Statement  of
Financial  Accounting  Standards  No.  144  "Accounting  for the  Impairment  or
Disposal of Long-Lived  Assets."  Accordingly,  when the  Partnership  makes the
decision  to sell or commits to a plan to sell a Property  within one year,  its
operating results are reported as discontinued operations.

Results of Operations

Comparison  of the year ended  December 31, 2003 to the year ended  December 31,
2002

         Rental revenues from continuing operations were $1,696,453 for the year
ended  December 31, 2003 as compared to  $1,700,468  in the same period in 2002.
While rental revenues from continuing  operations  remained constant during 2003
as  compared  to 2002,  they were  impacted by the  following  items.  AmeriKing
Corporation, the parent company to National Restaurant Enterprises,  Inc., which
was the tenant of the Properties in Harvey,  Lyons and Chicago Ridge,  Illinois,
experienced  financial  difficulties  and filed  for  bankruptcy  protection  in
December  2002.  The  tenant  has  continued  paying  rent  for  each  of  these
Properties;  however,  during 2003, the Partnership  granted a rent reduction of
approximately  $24,800,  for the period  January  through  February 2003, to the
tenant  of  these   Properties,   and  a  second  temporary  rent  reduction  of
approximately  $49,600  for the  period  September  through  December  2003.  In
December  2003,  the leases  relating  to the  Properties  were  assigned to and
assumed by a new tenant. As a result of the assignment and assumption, the rents
due under the leases have been reduced.  The Partnership  does not believe these
reduced rents will have a material  adverse  effect on the operating  results of
the Partnership.

         The decrease in rental revenues from continuing  operations during 2003
as  discussed  above,  was offset by the  acquisition  of a Property in Houston,
Texas in June 2002 with the majority of the net sales proceeds received from the
2002 sales of the Properties in Mesquite, Nevada and Knoxville, Tennessee.

         During the years  ended  December  31, 2003 and 2002,  the  Partnership
recognized  income of $645,804 and $543,978,  respectively,  attributable to the
net operating results reported by unconsolidated joint ventures. The increase in
net income earned by  unconsolidated  joint ventures  during 2003, was partially
due to the  Partnership  reinvesting  the majority of the net proceeds  from the
sales of the Properties in Mesquite,  Nevada and Wilmette,  Illinois during 2002
in Katy Joint  Venture  and a tenancy in common  arrangement  for a Property  in
Kenosha,  Wisconsin,  with affiliates of the General  Partners.  Also, CNL Ocean
Shores Joint Venture, in which the Partnership owned a 30.94% interest, sold its
vacant  Property in Ocean Shores,  Washington to a third party in September 2003
and recorded a gain of approximately $413,700 for which the Partnership received
a liquidating distribution of approximately $242,800.

         The increase in net income earned by unconsolidated  joint ventures was
partially  offset by the fact that during the year ended  December 31, 2002, the
Partnership  and an affiliate  of the General  Partners,  as  tenants-in-common,
collected and recognized as revenues  approximately  $309,700 in past due rents.
Phoenix  Restaurant  Group,  Inc.,  the former  tenant of the Property in Corpus
Christi,  Texas,  in which the  Partnership  owns an  approximate  27% interest,
ceased  paying rent and filed for  bankruptcy  in 2001.  During April 2002,  the
bankruptcy court assigned the lease to a new tenant, an affiliate of the General
Partners,  and as a result,  the tenancy in common  collected the past due rents
from  the  new  tenant.  All  other  lease  terms  remained  unchanged  and  are
substantially the same as the Partnership's other leases. In addition, in August
2002,  Mansfield Joint Venture,  in which the  Partnership  owns a 21% interest,
sold the  Property in  Mansfield,  Texas  resulting  in a gain of  approximately
$269,800.  The Partnership  recorded its pro-rata share of the gain as equity in
earnings.  The joint venture  reinvested the net sales proceeds in a Property in
Arlington, Texas.

         During  the  year  ended  December  31,  2003,   four  lessees  of  the
Partnership,  Golden Corral Corporation,  National Restaurant Enterprises, Inc.,
Carrols  Corporation,  and RTM, Inc., each  contributed more than ten percent of
the  Partnership's  total rental  revenues  (including  rental revenues from the
Partnership's share of rental income from Properties owned by joint ventures and
Properties   owned  with  separate   affiliates  of  the  General   Partners  as
tenants-in-common).  As of December 31, 2003, Golden Corral Corporation and Taco
Cabana, LP were each the lessee under leases relating to four  restaurants,  and
RTM,  Inc.,  was the lessee under leases  relating to three  restaurants.  It is
anticipated  that based on the minimum rental  payments  required by the leases,
Golden Corral Corporation,  Carrols Corporation and RTM, Inc. each will continue
to contribute more than ten percent of the  Partnership's  total rental revenues
in 2004. In addition,  four Restaurant Chains,  Golden Corral, Burger King, Taco
Cabana,   and  Arby's,   each  accounted  for  more  than  ten  percent  of  the
Partnership's  total  rental  revenues  during the year ended  December 31, 2003
(including  rental revenues from the  Partnership's  share of rental income from
Properties owned by joint ventures and Properties owned with separate affiliates
of the General Partners as  tenants-in-common).  In 2004, it is anticipated that
each of these four  Restaurant  Chains will continue to contribute more than ten
percent of the total rental  revenues to which the Partnership is entitled under
the terms of the leases.  Any failure of these lessees or Restaurant Chains will
have a material adverse affect on the Partnership's income if the Partnership is
not able to re-lease or sell the Properties in a timely manner.

         During the years ended December 31, 2003 and 2002, the Partnership also
earned $902 and  $16,269,  respectively,  in interest and other  income.  During
2002,  interest  and other  income was higher as  compared  to 2003  because the
Partnership   recognized   as  other  income  the   reimbursement   of  property
expenditures  of  approximately  $11,200,  which were incurred in previous years
related to vacant  Properties.  Interest  and other income was lower during 2003
due to a decline in interest rates and a decrease in the average cash balance.

         Operating expenses, including depreciation and amortization expense and
provision for  write-down of assets,  were $551,485 and $1,004,659 for the years
ended  December  31, 2003 and 2002,  respectively.  The  decrease  in  operating
expenses  during 2003,  was due to the recording of provisions for write-down of
assets,  during 2002,  in the amount of $456,000  relating to the  Properties in
Harvey and Chicago Ridge,  Illinois, as a result of AmeriKing  Corporation,  the
parent company to National Restaurant Enterprises,  Inc. which was the tenant of
these  Properties,  filing for bankruptcy  protection,  as described  above. The
provision   represented  the  difference  between  the  carrying  value  of  the
Properties and their estimated fair value.

         The decrease in operating  expenses  during the year ended December 31,
2003  was  also   partially  due  to  a  decrease  in  the  costs  incurred  for
administrative  expenses for servicing the Partnership and its Properties during
2003. The decrease in operating expenses during the year ended December 31, 2003
was  partially  offset by an increase in  depreciation  expense as a result of a
Property  acquisition in 2002, and the reclassification of the lease relating to
the Property in Muncie, Indiana from direct financing leases to operating leases
due to an  amendment  to the lease.  Also,  there was an  increase  in state tax
expense relating to several states in which the Partnership conducts business.

         During 2002, the Partnership identified and sold the Properties located
in Mesquite,  Nevada; Knoxville,  Tennessee; and Wilmette,  Illinois, which were
classified as discontinued  operations in the accompanying financial statements.
In October 2001, Phoenix  Restaurant Group, Inc. and its subsidiaries,  a tenant
of the  Partnership,  filed for  bankruptcy  protection  and  rejected the lease
relating to the property in Mesquite,  Nevada.  In March 2002,  the  Partnership
sold  the  Property  to a  third  party.  Since  the  Partnership  had  recorded
provisions  for  write-down  of assets of $465,915 and $28,644  during the years
2001 and 2000, respectively.  No gain or loss was recognized in 2002 relating to
the  sale.  In May and  June  2002,  the  Partnership  sold  its  Properties  in
Knoxville,  Tennessee  and Wilmette,  Illinois to third  parties  resulting in a
total gain of  approximately  $285,700.  The majority of the net sales  proceeds
from the sales of these  Properties  were  reinvested in three  Properties,  one
owned directly by the Partnership and the other two owned  indirectly  through a
tenancy in common and a joint venture.

         During 2003, the  Partnership  identified one Property for sale located
in Warner Robins,  Georgia.  In June 2003, the Partnership  recorded a provision
for write-down of assets of $213,000 relating to the Property,  after the tenant
who was  experiencing  financial  difficulties  surrendered  the  premises.  The
provision  represented the difference between the carrying value of the Property
and its  estimated  fair value.  The Property  was  classified  as  discontinued
operations in the accompanying financial statements and was reclassified to real
estate held for sale.  The  Partnership  recognized a net rental loss  (Property
related  expenses and  provision  for  write-down  of assets in excess of rental
revenues) of $184,260  and net rental  income  (rental  revenues  less  Property
related  expenses and provision for write-down of assets) of $184,379 during the
years  ended  December  31,  2003  and  2002,  respectively,  relating  to these
Properties.

         During  the year  ended  December  31,  2003,  CNL Ocean  Shores  Joint
Venture,  in which the  Partnership  owned a 30.94%  interest,  sold its  vacant
Property in Ocean Shores,  Washington, as described above. The financial results
relating to the  Property in Ocean  Shores,  Washington  and a Property  sold in
August 2002 by Mansfield  Joint  Venture,  in which the  Partnership  owns a 21%
interest, were classified as discontinued operations in the combined,  condensed
financial  information  reported in the footnotes to the accompanying  financial
statements for the joint ventures and the tenancies in common with affiliates of
the General  Partners.  The  Partnership's  pro-rata  share of these  amounts is
included in equity in earnings of joint ventures in the  accompanying  financial
statements.

Comparison  of the year ended  December 31, 2002 to the year ended  December 31,
2001

         Rental revenues from continuing operations were $1,700,468 for the year
ended  December 31, 2002 as compared to  $1,640,597  in the same period in 2001.
The slight increase in rental revenues from continuing  operations  during 2002,
was due to the fact the  Partnership  reinvested  the  majority of the net sales
proceeds from the 2001 and 2002 sale of the Properties.

         During the years  ended  December  31, 2002 and 2001,  the  Partnership
recognized income of $543,978 and a loss of $136,021, respectively, attributable
to the net operating results reported by unconsolidated joint ventures.  Results
were  lower  during  2001  because  PRG,  the tenant of the  Property  in Corpus
Christi,  Texas,  experienced  financial  difficulties and ceased paying rent in
2001. As a result, the Partnership and an affiliate of the General Partners,  as
tenants-in-common,  in which the  Partnership  owns an approximate 27% interest,
stopped  recording  rental  revenues.  Property  related expenses such as, legal
fees,  insurance  and real  estate  taxes  relating to this  Property  were also
incurred and a provision for write-down of assets of approximately  $356,700 was
recorded. The provision represented the difference between the carrying value of
the  Property  and its  estimated  fair value.  In October  2001,  PRG filed for
Chapter  11  bankruptcy  protection.  Since the  bankruptcy  filing,  the tenant
resumed paying rent. The  Partnership and the affiliate,  as  tenants-in-common,
received  from  PRG the  rent  payments  relating  to  this  Property  from  the
bankruptcy  date through April 2002.  During April 2002,  the  bankruptcy  court
assigned its lease to a new tenant,  an affiliate of the General  Partners which
has continued to pay rent pursuant to the lease.  All other lease terms remained
unchanged and are substantially the same as the Partnership's other leases. As a
result of the assignment  relating to this Property,  the Partnership  collected
from the new tenant  $309,700 in rents not  collected  in 2001 from the previous
tenant.

         In addition,  the operating  results reported by  unconsolidated  joint
ventures were lower during 2001, as compared to the same period in 2002, because
CNL  Ocean  Shores  Joint  Venture,  in  which  the  Partnership  owned a 30.94%
interest,  recorded  a  provision  for write  down of  assets  of  approximately
$781,700 in 2001. The provision  represented the difference between the carrying
value of the Property and its estimated  fair value.  The tenant of the Property
owned by this joint venture experienced  financial  difficulties and vacated the
Property in April 2001.  During 2002, the joint venture has not recorded  rental
revenues  relating to this Property.  In September  2003, CNL Ocean Shores Joint
Venture sold its property to a third party,  and  dissolved the joint venture as
described above.

         The increase in net operating results reported by unconsolidated  joint
ventures  during  2002,  as compared  to the same  period in 2001,  was also the
result of the Partnership investing during 2001 and 2002 the majority of the net
proceeds  from the sales of Properties in Warner  Robins,  Georgia;  Long Beach,
California; Kentwood, Michigan; Mesquite, Nevada; and Wilmette, Illinois; in two
joint  ventures and two  additional  Properties,  each as a separate  tenancy in
common with affiliates of the General Partners.

         In August 2002,  Mansfield Joint Venture, in which the Partnership owns
a 21% interest,  sold the Property in Mansfield,  Texas,  and reinvested the net
sales proceeds in a Property in Arlington, Texas.

         During the years  ended  December  31, 2002 and 2001,  the  Partnership
earned $16,269 and $56,643,  respectively,  in interest and other income. During
2001,  interest  and other  income were higher as compared to the same period in
2002 due to the Partnership  recognizing as income the remainder of the security
deposit from a former tenant. In addition,  higher average cash balances existed
during 2001 pending reinvestment in an additional income producing Property.

         Operating expenses, including depreciation and amortization expense and
provision for write-down of assets,  were  $1,004,659 and $683,552 for the years
ended  December  31, 2002 and 2001,  respectively.  The  increase  in  operating
expenses  during  2002,  as compared to the same period in 2001,  was due to the
recording  of  provisions  for  write-down  of assets in the amount of  $456,000
relating to the Properties in Harvey and Chicago Ridge, Illinois, as a result of
the AmeriKing Corporation's bankruptcy.

         The increase in operating  expenses  during 2002 was also partially due
to an increase in depreciation expense as a result of Property  acquisitions and
the  reclassification  of the lease relating to the Property in Muncie,  Indiana
from direct  financial  leases to  operating  leases due to an  amendment to the
lease.

         The increase in operating expenses during 2002, as compared to the same
period in 2001,  was  partially  offset by a decrease in the costs  incurred for
administrative  expenses for servicing the  Partnership  and its  Properties,  a
decrease in Property  expenses such as legal fees and real estate taxes relating
to several  Properties with tenants that experienced  financial  difficulties in
2001, and a decrease in state taxes.

         During 2001,  the  Partnership  recorded  provisions  for write-down of
assets  in the  amount  of  $39,576  relating  to  the  Property  in  Inglewood,
California, which was sold at no additional gain or loss during 2001.

         During  2001,  the  Partnership  sold  a  Property  in  Houston,  Texas
resulting in a gain of $4,284, a Property in El Dorado,  California resulting in
a gain of $345,572 and a Property in Kentwood,  Michigan  resulting in a loss of
$38,877.

         During 2002, the Partnership identified and sold the Properties located
in Mesquite,  Nevada; Knoxville,  Tennessee; and Wilmette,  Illinois, which were
classified as discontinued  operations in the accompanying financial statements.
In October 2001, Phoenix  Restaurant Group, Inc. and its subsidiaries,  a tenant
of the  Partnership,  filed for  bankruptcy  protection  and  rejected the lease
relating to the property in Mesquite,  Nevada.  In March 2002,  the  Partnership
sold  the  Property  to a  third  party.  Since  the  Partnership  had  recorded
provisions  for  write-down  of assets of $465,915 and $28,644  during the years
2001 and 2000, respectively.  No gain or loss was recognized in 2002 relating to
the  sale.  In May and  June  2002,  the  Partnership  sold  its  properties  in
Knoxville,  Tennessee  and Wilmette,  Illinois to third  parties  resulting in a
total gain of approximately  $285,700.  During 2003, the Partnership  identified
one  property  for sale  located in Warner  Robins,  Georgia.  The  property was
classified as discontinued  operations in the accompanying  financial statements
and was  reclassified to real estate held for sale. The  Partnership  recognized
net rental income (rental  revenues less Property related expenses and provision
for  write-down of assets) of $184,379 and a net rental loss  (Property  related
expenses and provision for write-down of assets in excess of rental revenues) of
$220,561  during  the years  ended  December  31,  2002 and 2001,  respectively,
relating to these Properties.

         The General Partners continuously  evaluate strategic  alternatives for
the  Partnership,  including  alternatives  to provide  liquidity to the Limited
Partners.

         The  Partnership's  leases  as of  December  31,  2003,  are  generally
triple-net  leases and  contain  provisions  that the General  Partners  believe
mitigate  the adverse  effect of  inflation.  Such  provisions  include  clauses
requiring the payment of percentage rent based on certain restaurant sales above
a specified  level and/or  automatic  increases in base rent at specified  times
during the term of the lease.  Inflation,  overall,  has had a minimal effect on
results of operations of the Partnership.  Continued inflation may cause capital
appreciation of the  Partnership's  Properties.  Inflation and changing  prices,
however,  also may have an adverse impact on the sales of the restaurants and on
potential capital appreciation of the Properties.

         In January 2003,  the Financial  Accounting  Standards  Board  ("FASB")
issued  FASB  Interpretation  No.  46 ("FIN  46"),  "Consolidation  of  Variable
Interest Entities" to expand upon and strengthen  existing  accounting  guidance
that  addresses  when a company  should  include  the  assets,  liabilities  and
activities of another entity in its financial  statements.  To improve financial
reporting by companies involved with variable interest entities, FIN 46 requires
that a variable  interest entity be consolidated by a company if that company is
subject  to a  majority  risk  of  loss  from  the  variable  interest  entity's
activities or entitled to receive a majority of the entity's residual returns or
both.  Prior to FIN 46, a  company  generally  included  another  entity  in its
consolidated  financial  statements  only if it  controlled  the entity  through
voting interests.  In December 2003, the FASB issued FASB Interpretation No. 46R
("FIN 46R"), to clarify some of the provisions of FIN 46. Under FIN 46R, special
effective date provisions apply to entities that have fully or partially applied
FIN 46  prior  to  issuance  of FIN 46R.  Otherwise,  application  of FIN 46R is
required in  financial  statements  of public  entities  that have  interests in
structures that are commonly referred to as special-purpose entities for periods
ending after December 15, 2003. Application by public entities, other than small
business issuers,  for all other types of variable interest entities is required
in financial statements for periods ending after March 15, 2004. The Partnership
did not fully or partially  apply FIN 46 prior to the issuance of FIN 46R. Also,
the Partnership  does not have interests in structures  commonly  referred to as
special-purpose entities.  Therefore,  application of FIN 46R is required in the
Partnership's  financial statements for periods ending after March 15, 2004. The
General  Partners  believe  adoption  of this  standard  may  result  in  either
consolidation  or  additional  disclosure   requirements  of  the  Partnership's
unconsolidated  joint  ventures,  which are  currently  accounted  for under the
equity method.  However,  such  consolidation  is not expected to  significantly
impact the Partnership's results of operations.


Item 7A. Quantitative and Qualitative Disclosures About Market Risk

         Not applicable.


Item 8.  Financial Statements and Supplementary Data





<PAGE>




                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                                    CONTENTS








                                                                      Page

Report of Independent Certified Public Accountants                     20

Financial Statements:

     Balance Sheets                                                    21

     Statements of Income                                              22

     Statements of Partners' Capital                                   23

     Statements of Cash Flows                                       24-25

     Notes to Financial Statements                                  26-39







<PAGE>











               Report of Independent Certified Public Accountants




To the Partners
CNL Income Fund XVII, Ltd.


In our opinion,  the accompanying  balance sheets and the related  statements of
income,  of partners'  capital and of cash flows present fairly, in all material
respects,  the  financial  position  of CNL Income  Fund XVII,  Ltd.  (a Florida
limited  partnership)  at  December  31,  2003 and 2002,  and the results of its
operations  and its cash flows for each of the three  years in the period  ended
December 31, 2003 in conformity with accounting principles generally accepted in
the United  States of  America.  In  addition,  in our  opinion,  the  financial
statement  schedules  listed in the index appearing under item 15(a)(2)  present
fairly, in all material respects, the information set forth therein when read in
conjunction with the related financial  statements.  These financial  statements
and  the  financial   statement   schedules  are  the   responsibility   of  the
Partnership's  management;  our responsibility is to express an opinion on these
financial  statements and the financial statement schedules based on our audits.
We  conducted  our  audits  of these  statements  in  accordance  with  auditing
standards generally accepted in the United States of America, which require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial   statements,   assessing  the  accounting  principles  used  and
significant  estimates made by management,  and evaluating the overall financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for our opinion.

As  described in Note 1 to the  financial  statements,  on January 1, 2002,  the
Partnership  adopted  Statement  of  Financial   Accounting  Standards  No.  144
"Accounting for the Impairment or Disposal of Long-Lived Assets."




/s/ PricewaterhouseCoopers LLP

Orlando, Florida
March 24, 2004


<PAGE>



                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                                 BALANCE SHEETS

<TABLE>

                                                                                          December 31,
                                                                                  2003                   2002
                                                                            -----------------      ------------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                          ASSETS

Real estate properties with operating leases, net                               $ 14,077,876           $  14,386,288
Net investment in direct financing leases                                            399,726                 410,120
Real estate held for sale                                                            496,678                 705,863
Investment in joint ventures                                                       5,531,064               5,749,285
Cash and cash equivalents                                                            816,092                 829,739
Receivables, less allowance for doubtful
     accounts of $43,516 in 2003                                                           -                  36,516
Due from related parties                                                                 277                     490
Accrued rental income                                                                446,800                 432,864
Other assets                                                                          13,121                  12,370
                                                                            -----------------      ------------------

                                                                                $ 21,781,634            $ 22,563,535
                                                                            =================      ==================



            LIABILITIES AND PARTNERS' CAPITAL

Accounts payable and accrued expenses                                             $    7,973              $    3,494
Real estate taxes payable                                                             38,114                  13,457
Distributions payable                                                                600,000                 600,000
Due to related parties                                                                11,242                  26,600
Rents paid in advance                                                                 32,407                  31,910
Deferred rental income                                                                46,408                  49,998
                                                                            -----------------      ------------------
         Total liabilities                                                           736,144                 725,459

Partners' capital                                                                 21,045,490              21,838,076
                                                                            -----------------      ------------------

                                                                                $ 21,781,634            $ 22,563,535
                                                                            =================      ==================

</TABLE>
                 See accompanying notes to financial statements.
<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                              STATEMENTS OF INCOME

<TABLE>

                                                                              Year Ended December 31,
                                                                     2003               2002              2001
                                                                ----------------   ---------------   ----------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Revenues:
     Rental income from operating leases                           $  1,653,180    $    1,638,297        $  1,541,558
     Earned income from direct financing leases                          43,273            62,171             99,039
       Contingent rental income                                              --                --              1,111
     Interest and other income                                              902            16,269             56,643
                                                                ----------------   ---------------   ----------------
                                                                      1,697,355         1,716,737          1,698,351
                                                                ----------------   ---------------   ----------------
Expenses:
     General operating and administrative                               180,637           207,379            253,794
     Property related                                                     9,530             3,042             52,021
     Management fee to related parties                                   23,448            24,452             21,315
     State and other taxes                                               25,246             9,258             34,733
     Depreciation and amortization                                      312,624           304,528            282,113
     Provision for write-down of assets                                      --           456,000             39,576
                                                                ----------------   ---------------   ----------------
                                                                        551,485         1,004,659            683,552
                                                                ----------------   ---------------   ----------------
Income before gain on sale of assets and equity in
     earnings (loss) of  unconsolidated joint ventures                1,145,870           712,078          1,014,799

Gain on sale of assets                                                       --                --            310,979

Equity in earnings (loss) of unconsolidated joint ventures              645,804           543,978           (136,021  )
                                                                ----------------   ---------------   ----------------

Income from continuing operations                                     1,791,674         1,256,056          1,189,757
                                                                ----------------   ---------------   ----------------

Discontinued operations:

     Income (loss) from discontinued operations                        (184,260  )        184,379           (220,561  )
     Gain on disposal of discontinued operations                             --           285,677                 --
                                                                ----------------   ---------------   ----------------
                                                                       (184,260  )        470,056           (220,561  )
                                                                ----------------   ---------------   ----------------


Net income                                                         $  1,607,414       $ 1,726,112        $   969,196
                                                                ================   ===============   ================

Income (loss) per limited partner unit
     Continuing operations                                           $     0.60        $     0.42         $     0.40
     Discontinued operations                                              (0.06  )           0.16              (0.08  )
                                                                ----------------   ---------------   ----------------

                                                                     $     0.54       $      0.58       $      0.32
                                                                ================   ===============   ================


Weighted average number of limited partner units
     outstanding                                                      3,000,000         3,000,000          3,000,000
                                                                ================   ===============   ================
</TABLE>

                See accompanying notes to financial statements.

<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                         STATEMENTS OF PARTNERS' CAPITAL

                  Years Ended December 31, 2003, 2002, and 2001

<TABLE>

                                                    General Partners                                          Limited Partners
                                          ------------------------------------    --------------------------------------------------
                                                              Accumulated                                               Accumulated
                                         Contributions         Earnings         Contributions       Distributions         Earnings
                                        -----------------   ----------------   -----------------   ----------------   --------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Balance, December 31, 2000                     $     1,000     $    (5,460 )   $  30,000,000      $ (10,682,464 )      $  8,219,692

    Distributions to limited partners
       ($0.80 per limited partner unit)                 --              --                --         (2,400,000 )                --
    Net income                                          --              --                --                 --             969,196
                                          -----------------  --------------   ---------------   ----------------   -----------------

Balance, December 31, 2001                           1,000          (5,460 )      30,000,000        (13,082,464 )         9,188,888

    Distributions to limited partners
       ($0.80 per limited partner unit)                 --              --                --         (2,400,000 )                --
    Net income                                          --              --                --                 --           1,726,112
                                          -----------------  --------------   ---------------   ----------------   -----------------

Balance, December 31, 2002                           1,000          (5,460 )      30,000,000        (15,482,464 )        10,915,000

    Distributions to limited partners
       ($0.80 per limited partner unit)                 --              --                --         (2,400,000 )                --
    Net income                                          --              --                --                 --           1,607,414
                                          -----------------  --------------   ---------------   ----------------   -----------------

Balance, December 31, 2003                     $     1,000     $    (5,460 )   $  30,000,000      $ (17,882,464 )     $  12,522,414
                                          =================  ==============   ===============   ================   =================

</TABLE>
                See accompanying notes to financial statements.



<PAGE>


    Syndication
     Costs              Total
 --------------   --------------

   $ (3,590,000 )    $23,942,768


             --       (2,400,000 )
             --          969,196
  --------------   --------------

     (3,590,000 )     22,511,964


             --       (2,400,000 )
             --        1,726,112
  --------------   --------------

     (3,590,000 )     21,838,076


             --       (2,400,000 )
             --        1,607,414
  --------------   --------------

   $ (3,590,000 )    $21,045,490
  ==============   ==============


                See accompanying notes to financial statements.



<PAGE>

                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                            STATEMENTS OF CASH FLOWS

<TABLE>

                                                                                      Year Ended December 31,
                                                                            2003               2002                2001
                                                                       ---------------    ----------------    ----------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

      Net income                                                          $ 1,607,414       $  1,726,112           $  969,196
                                                                       ---------------    ----------------    ----------------
      Adjustments to reconcile net income to net cash provided by operating
         activities:
             Depreciation                                                     318,942             330,474             342,690
             Amortization                                                       4,212               4,212               4,212
             Provision for write-down of assets                               213,000             456,000             505,491
             Equity in earnings of unconsolidated joint
                ventures, net of distributions                                (28,787 )            42,015             382,447
             Gain on sale of assets                                                --            (285,677 )          (310,979 )
             Decrease (increase) in receivables                                36,516             (36,626 )            26,719
             Decrease (increase) in due from related parties                      213              18,799             (14,396 )
             Amortization of investment in direct financing
                leases                                                         10,394              14,085              35,649
             Increase in accrued rental income                                (20,155 )           (46,289 )          (118,167 )
             Decrease (increase) in other assets                                 (751 )            (6,516 )            12,039
             Increase (decrease) in accounts payable and
                accrued expenses and real estate taxes payable                 29,136               7,977             (17,688 )
             Increase (decrease) in due to related parties                    (15,358 )            15,018              (2,237 )
             Increase (decrease) in rents paid in advance
                and deposits                                                      497              23,560             (27,053 )
             Decrease in deferred rental income                              (11,716)              (3,480 )            (3,480 )
                                                                       ---------------    ----------------    ----------------
                   Total adjustments                                          536,143             533,552             815,247
                                                                       ---------------    ----------------    ----------------

      Net cash provided by operating activities                             2,143,557           2,259,664           1,784,443
                                                                       ---------------    ----------------    ----------------

      Cash Flows from Investing Activities:
         Additions to real estate properties with operating
             leases                                                                --          (1,364,194 )        (1,216,598 )
             Proceeds from sale of real estate properties                          --           3,499,595           3,272,711
             Liquidating distribution from joint venture                      242,796                  --                  --
             Investment in joint ventures                                          --          (2,136,538 )        (2,066,846 )
             (Increase) decrease in restricted cash                                --             297,288            (297,288 )
                                                                       ---------------    ----------------    ----------------
                  Net cash provided by (used in) investing
                activities                                                    242,796             296,151            (308,021 )
                                                                       ---------------    ----------------    ----------------

      Cash Flows from Financing Activities:
         Distributions to limited partners                                 (2,400,000 )        (2,400,000 )        (2,400,000 )
                                                                       ---------------    ----------------    ----------------
                Net cash used in financing activities                      (2,400,000 )        (2,400,000 )        (2,400,000 )
                                                                       ---------------    ----------------    ----------------

      Net increase (decrease) in cash and cash equivalents                    (13,647 )           155,815            (923,578 )

      Cash and cash equivalents at beginning of year                          829,739             673,924           1,597,502
                                                                       ---------------    ----------------    ----------------

      Cash and cash equivalents at end of year                            $   816,092         $   829,739         $   673,924
                                                                       ===============    ================    ================
</TABLE>
                 See accompanying notes to financial statements.

<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                      STATEMENTS OF CASH FLOWS - CONTINUED

<TABLE>

                                                                                      Year Ended December 31,
                                                                            2003               2002                2001
                                                                       ---------------    ----------------    ----------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

    Supplemental Schedule of Non-Cash Financing Activities:

      Distributions declared and unpaid at December 31                   $  600,000           $   600,000         $   600,000
                                                                       ===============    ================    ================

</TABLE>
                 See accompanying notes to financial statements.

<PAGE>

                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


1.       Significant Accounting Policies

         Organization  and Nature of Business - CNL Income Fund XVII,  Ltd. (the
         "Partnership") is a Florida limited  partnership that was organized for
         the purpose of acquiring both newly constructed and existing restaurant
         properties,  as well as properties  upon which  restaurants  were to be
         constructed,  which are leased  primarily  to operators of national and
         regional fast-food, family-style and casual dining restaurant chains.

         The general partners of the Partnership are CNL Realty Corporation (the
         "Corporate  General  Partner"),  James M.  Seneff,  Jr.  and  Robert A.
         Bourne.  Mr.  Seneff and Mr.  Bourne are also 50%  shareholders  of the
         Corporate General Partner. The general partners have responsibility for
         managing the day-to-day operations of the Partnership.

         Real Estate and Lease  Accounting  - The  Partnership  records the real
         estate  property  acquisitions  at cost.  The  properties are leased to
         third parties  generally on a triple-net  basis,  whereby the tenant is
         generally  responsible  for  all  operating  expenses  relating  to the
         property, including property taxes, insurance, maintenance and repairs.
         During the years ended  December 31, 2003,  2002 and 2001,  the tenants
         paid,  or  are  expected  to  pay,   directly  to  real  estate  taxing
         authorities    approximately   $374,500,    $312,800,   and   $321,200,
         respectively,  in estimated  real estate taxes in  accordance  with the
         terms of their leases..

         The leases of the  Partnership  provide for base minimum  annual rental
         payments payable in monthly installments.  In addition,  certain leases
         provide for  contingent  rental  revenues  based on the tenants'  gross
         sales in  excess  of a  specified  threshold.  The  Partnership  defers
         recognition  of  the  contingent  rental  revenues  until  the  defined
         thresholds  are met.  The leases  are  accounted  for using  either the
         operating or the direct financing method.

              Operating method - Real estate property leases accounted for using
              the operating  method are recorded at cost,  revenue is recognized
              as rentals are earned and depreciation is charged to operations as
              incurred.  Buildings are depreciated on the  straight-line  method
              over their  estimated  useful  lives of 30 years.  When  scheduled
              rentals  vary during the lease  term,  income is  recognized  on a
              straight-line basis so as to produce a constant periodic rent over
              the lease term  commencing  on the date the  property is placed in
              service.

              Direct  financing  method - Leases  accounted for using the direct
              financing  method are recorded at their net  investment  (which at
              the inception of the lease  generally  represents  the cost of the
              asset).  Unearned  income is deferred and amortized to income over
              the lease  terms so as to  produce  a  constant  periodic  rate of
              return on the Partnership's investment in the leases. For property
              leases  classified  as  direct  financing  leases,   the  building
              portions of the majority of property  leases are  accounted for as
              direct  financing  leases while the land  portions of these leases
              are accounted for as operating leases.



<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001

1.       Significant Accounting Policies - Continued

         Accrued  rental  income  represents  the  aggregate  amount  of  income
         recognized  on a  straight-line  basis in  excess of  scheduled  rental
         payments to date. In contrast,  deferred  rental income  represents the
         aggregate amount of scheduled rental payments to date (including rental
         payments due during construction and prior to the property being placed
         in service) in excess of income  recognized  on a  straight-line  basis
         over the lease term  commencing  on the date the  property is placed in
         service.

         Leases are  generally  for 15 to 20 years and  provide  for minimum and
         contingent rentals.  The lease options generally allow tenants to renew
         the leases for two to four successive  five-year periods subject to the
         same terms and conditions of the initial lease.  Most leases also allow
         the tenant to  purchase  the  property  at fair  market  value  after a
         specified portion of the lease has elapsed.

         When  the  properties  are  sold,  the  related  cost  and  accumulated
         depreciation  for operating  leases and the net  investment  for direct
         financing  leases,  plus any accrued rental income,  or deferred rental
         income,  are removed  from the  accounts and gains or losses from sales
         are reflected in income. The general partners of the Partnership review
         properties for impairment  whenever events or changes in  circumstances
         indicate that the carrying  amount of the assets may not be recoverable
         through   operations.   The  general  partners   determine  whether  an
         impairment  in value has occurred by  comparing  the  estimated  future
         undiscounted cash flows,  including the residual value of the property,
         with the carrying cost of the individual property.

         When the  collection  of amounts  recorded as rental or other income is
         considered  to be  doubtful,  a provision  is recorded to increase  the
         allowance for doubtful accounts. If amounts are subsequently determined
         to be  uncollectible,  the  corresponding  receivable and allowance for
         doubtful accounts are decreased accordingly.

         Investment  in  Joint  Ventures  - The  Partnership  accounts  for  its
         interests in CNL Kingston Joint Venture;  CNL Mansfield  Joint Venture;
         CNL VII & XVII Lincoln Joint Venture;  and Katy Joint Venture;  and the
         properties in Corpus Christi, Texas; Akron, Ohio;  Fayetteville,  North
         Carolina;   Zephyrhills,   Florida;  Waldorf,  Maryland;  and  Kenosha,
         Wisconsin,  for which each property is held as  tenants-in-common,  are
         accounted  for  using  the  equity  method  since  each  joint  venture
         agreement  requires  the consent of all  partners on all key  decisions
         affecting the operations of the underlying property.

         Cash and Cash Equivalents - The Partnership considers all highly liquid
         investments  with a maturity of three months or less when  purchased to
         be cash  equivalents.  Cash  and cash  equivalents  consist  of  demand
         deposits at commercial  banks and money market funds.  Cash equivalents
         are stated at cost plus accrued  interest,  which  approximates  market
         value.

         Cash  accounts  maintained  on  behalf  of the  Partnership  in  demand
         deposits  at  commercial  banks  and  money  market  funds  may  exceed
         federally insured levels;  however, the Partnership has not experienced
         any losses in such accounts.

         Income Taxes - Under  Section 701 of the  Internal  Revenue  Code,  all
         income,  expenses and tax credit items flow through to the partners for
         tax  purposes.  Therefore,  no  provision  for federal  income taxes is
         provided in the accompanying  financial statements.  The Partnership is
         subject to certain state taxes on its income and property.

         Additionally,  for tax  purposes,  syndication  costs are  included  in
         Partnership equity and in the basis of each partner's  investment.  For
         financial reporting  purposes,  syndication costs represent a reduction
         of  Partnership  equity and a reduction in the basis of each  partner's
         investment.


<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001

1.       Significant Accounting Policies - Continued

         Rents Paid in  Advance - Rents  paid in  advance by lessees  for future
         periods are deferred upon receipt and are recognized as revenues during
         the period in which the rental income is earned.

         Use of Estimates - The general  partners of the Partnership have made a
         number of estimates and assumptions relating to the reporting of assets
         and liabilities and the disclosure of contingent assets and liabilities
         to prepare these  financial  statements in  conformity  with  generally
         accepted  accounting  principles.  The more significant areas requiring
         the use of  management  estimates  relate to the allowance for doubtful
         accounts  and future  cash flows  associated  with  long-lived  assets.
         Actual results could differ from those estimates.

         Reclassification   -  Certain  items  in  the  prior  year's  financial
         statements  have been  reclassified  to conform  to 2003  presentation.
         These  reclassifications had no effect on partner's capital, net income
         or cash flows.

         Statement of Financial Accounting Standards No. 144 - Effective January
         1, 2002,  the  Partnership  adopted  Statement of Financial  Accounting
         Standards  No.  144  ("FAS  144")  "Accounting  for the  Impairment  or
         Disposal  of  Long-Lived   Assets."  This  statement  requires  that  a
         long-lived  asset be  tested  for  recoverability  whenever  events  or
         changes in  circumstances  indicate that its carrying amount may not be
         recoverable.   The  carrying  amount  of  a  long-lived  asset  is  not
         recoverable  if it  exceeds  the  sum of the  undiscounted  cash  flows
         expected to result from the use and eventual  disposition of the asset.
         The assessment is based on the carrying amount of the asset at the date
         it is tested for recoverability.  An impairment loss is recognized when
         the carrying  amount of a long-lived  asset exceeds its estimated  fair
         value. If an impairment is recognized,  the adjusted carrying amount of
         a long-lived  asset is its new cost basis.  The statement also requires
         that the results of  operations of a component of an entity that either
         has been disposed of or is classified as held for sale be reported as a
         discontinued   operation  if  the  disposal   activity  was   initiated
         subsequent to the adoption of the Standard.

         FASB Interpretation No. 46 - In January 2003, the Financial  Accounting
         Standards Board ("FASB") issued FASB  Interpretation No. 46 ("FIN 46"),
         "Consolidation  of  Variable  Interest  Entities"  to  expand  upon and
         strengthen  existing  accounting guidance that addresses when a company
         should include the assets, liabilities and activities of another entity
         in  its  financial  statements.   To  improve  financial  reporting  by
         companies  involved with variable  interest  entities,  FIN 46 requires
         that a variable  interest  entity be  consolidated by a company if that
         company  is  subject  to a  majority  risk of loss  from  the  variable
         interest  entity's  activities or entitled to receive a majority of the
         entity's residual returns or both. Prior to FIN 46, a company generally
         included another entity in its consolidated  financial  statements only
         if it controlled the entity through voting interests. In December 2003,
         the FASB issued FASB  Interpretation  No. 46R ("FIN  46R"),  to clarify
         some of the provisions of FIN 46. Under FIN 46R, special effective date
         provisions  apply to entities that have fully or partially  applied FIN
         46 prior to issuance of FIN 46R.  Otherwise,  application of FIN 46R is
         required in financial statements of public entities that have interests
         in structures that are commonly referred to as special-purpose entities
         for  periods  ending  after  December15,  2003.  Application  by public
         entities,  other than small  business  issuers,  for all other types of
         variable  interest  entities is required in  financial  statements  for
         periods ending after March 15, 2004. The  Partnership  did not fully or
         partially  apply FIN 46 prior to the  issuance  of FIN 46R.  Also,  the
         Partnership does not have interests in structures  commonly referred to
         as  special-purpose  entities.  Therefore,  application  of FIN  46R is
         required in the Partnership's  financial  statements for periods ending
         after March 15, 2004.  The General  Partners  believe  adoption of this
         standard may result in either  consolidation  or additional  disclosure
         requirements of the Partnership's  unconsolidated joint ventures, which
         are currently  accounted  for under the equity  method.  However,  such
         consolidation is not expected to significantly impact the Partnership's
         results of operations.


<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


2.       Real Estate Properties with Operating Leases

         Real estate properties with operating leases consisted of the following
         at December 31:

<TABLE>

                                                                     2003                   2002
                                                              -------------------    -------------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                 Land                                           $      6,830,859          $    6,830,859
                 Buildings                                             9,225,912              9,225,912
                                                              -------------------    -------------------
                                                                      16,056,771             16,056,771
                 Less accumulated depreciation                        (1,978,895 )           (1,670,483 )
                                                              -------------------    -------------------
                                                                $     14,077,876             14,386,288
                                                              ===================    ===================
</TABLE>

         In June 2002, the Partnership  reinvested the majority of the net sales
         proceeds  it  received  from the sale of the  properties  in  Mesquite,
         Nevada and Knoxville,  Tennessee,  in a Taco Cabana property located in
         Houston, Texas, at a cost of approximately  $1,364,200 from CNL Funding
         2001-A, LP, an affiliate of the general partners.

         In 2002, the Partnership  recorded  provisions for write-down of assets
         in the amount of  $456,000  relating  to the  Properties  in Harvey and
         Chicago Ridge, Illinois. In December 2002, AmeriKing  Corporation,  the
         parent  company of National  Restaurant  Enterprises,  Inc., the former
         tenant  of these  Properties,  filed  for  bankruptcy  protection.  The
         provision  represented the difference between the carrying value of the
         Properties and their estimated fair value.

         The following is a schedule of the future  minimum lease payments to be
         received on noncancellable operating leases at December 31, 2003:

                            2004                    $  1,558,333
                            2005                       1,560,116
                            2006                       1,577,989
                            2007                       1,598,241
                            2008                       1,600,093
                            Thereafter                10,922,009
                                                  ---------------

                                                    $ 18,816,781
                                                  ===============


<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001

3.       Net Investment in Direct Financing Leases

         The  following  lists the  components  of the net  investment in direct
         financing leases at December 31:
<TABLE>

                                                                             2003                  2002
                                                                       -----------------     -----------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                   Minimum lease payments
                        receivable                                          $   666,973           $   720,639
                   Estimated residual values                                    113,894               113,894
                   Less unearned income                                        (381,141 )            (424,413 )
                                                                       -----------------     -----------------
                   Net investment in direct
                        financing leases                                    $   399,726           $   410,120
                                                                       =================     =================
</TABLE>

         The  following  is a schedule of future  minimum  lease  payments to be
         received on direct financing leases at December 31, 2003:

                            2004                       $   53,666
                            2005                           53,666
                            2006                           53,666
                            2007                           53,666
                            2008                           53,666
                            Thereafter                    398,643
                                                    --------------

                                                       $  666,973
                                                    ==============

4.       Investment in Joint Ventures

         The Partnership has interests of 21%, 60.06% and 86% in the profits and
         losses of CNL Mansfield  Joint Venture,  CNL Kingston Joint Venture and
         CNL VII & XVII  Lincoln  Joint  Venture,  respectively.  The  remaining
         interests  in  these  joint  ventures  are  held by  affiliates  of the
         Partnership which have the same general partners.

         The Partnership owns properties in Fayetteville, North Carolina; Corpus
         Christi,  Texas;  Akron,  Ohio;  Zephyrhills,   Florida,  and  Waldorf,
         Maryland, as tenants-in-common with affiliates of the general partners.
         The Partnership owns interests in these  properties of 19.56%,  27.42%,
         36.91%, 24% and 25%, respectively.

         In June 2002,  the  Partnership  reinvested  a portion of the net sales
         proceeds from the sale of the property in Mesquite,  Nevada, in a joint
         venture arrangement, Katy Joint Venture, with CNL Income Fund IX, Ltd.,
         a Florida limited partnership and an affiliate of the general partners.
         The joint venture  acquired a property in Katy,  Texas from CNL Funding
         2001-A,  LP. The Partnership and CNL Income Fund IX, Ltd.  entered into
         an  agreement  whereby each  co-venturer  will share in the profits and
         losses of the  property  in  proportion  to its  applicable  percentage
         interest. The Partnership contributed  approximately $416,700 for a 40%
         interest in this joint venture.

         In August 2002, the Partnership  reinvested the net sales proceeds from
         the  sale of the  Property  in  Wilmette,  Illinois  in a  Property  in
         Kenosha, Wisconsin as tenants-in-common with CNL Income Fund VIII, Ltd.
         ("CNL VIII"),  a Florida  limited  partnership  and an affiliate of the
         general partners, at an approximate cost of $1,883,000. The Partnership
         and CNL VIII  entered into an agreement  whereby  each  co-tenant  will
         share in the profits and losses of each  property in  proportion to its
         applicable   percentage   interest.    The   Partnership    contributed
         approximately $1,694,700 for a 90% interest in this property.


<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001

4.       Investment in Joint Ventures - Continued

         In August 2002,  Mansfield Joint Venture, in which the Partnership owns
         a 21% interest, sold the property in Mansfield, Texas to the tenant and
         received net sales proceeds of approximately  $1,011,500 resulting in a
         gain of  approximately  $269,800.  The joint  venture used the proceeds
         from the sale of the property  and  additional  contributions  from the
         Partnership and CNL Income Fund VII, Ltd., who are the general partners
         of  the  joint   venture,   of   approximately   $17,000  and  $63,900,
         respectively,  to acquire a property in  Arlington,  Texas from CNL Net
         Lease Investors, L.P., at an approximate cost of $1,089,900. CNL Income
         Fund VII, Ltd. and CNL Net Lease Investors,  L.P. are affiliates of the
         general partners.  The financial results for the property in Mansfield,
         Texas  are  reflected  as  discontinued   operations  in  the  combined
         condensed financial information presented below.

         In  September  2003,  CNL  Ocean  Shores  Joint  Venture,  in which the
         Partnership owned a 30.94% interest, sold its property to a third party
         for $824,600 resulting in a gain of approximately  $413,700.  The joint
         venture recorded  provisions for write-down of assets in previous years
         relating  to this  Property.  The  Partnership  and the  joint  venture
         partner  dissolved  the  joint  venture  in  accordance  with the joint
         venture  agreement  and  did  not  recognize  a  gain  or  loss  on the
         dissolution.    The   Partnership   received   approximately   $242,800
         representing  its pro  rata  share  of the  liquidation  proceeds.  The
         general  partners  intend  to  reinvest  a portion  of the  liquidation
         proceeds in an additional  property and also pay the liabilities of the
         Partnership,  including  distributions  to the  limited  partners.  The
         financial   results   relating  to  this   property  are  reflected  as
         discontinued   operations   in  the   combined,   condensed   financial
         information below.

         CNL Mansfield Joint Venture, CNL Kingston Joint Venture, CNL VII & XVII
         Lincoln  Joint  Venture,  Katy Joint  Venture and the  Partnership  and
         affiliates,  as  tenants-in-common  in six  separate  tenancy-in-common
         arrangements, each own one property.

         The following presents the combined,  condensed  financial  information
         for the joint  ventures and the  properties  held as  tenants-in-common
         with affiliates at:
<TABLE>

                                                                     December 31,               December 31,
                                                                         2003                       2002
                                                                 ----------------------   --------------------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

          Real estate properties with operating                         $   11,403,541                 $ 11,649,517
              leases, net
          Real estate held for sale                                                 --                      377,303
          Cash                                                                  78,972                       37,123
          Receivables, less allowance for doubtful
              accounts                                                           5,767                        6,468
          Accrued rental income                                                321,980                      237,749
          Other assets                                                              --                          267
          Liabilities                                                           56,333                       20,858
          Partners' capital                                                 11,753,927                   12,287,569


</TABLE>







<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


4.       Investment in Joint Ventures - Continued

<TABLE>


                                                             Years ended December 31,
                                                 2003                    2002                2001
                                          --------------------     ------------------  ------------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Continuing operations:
    Revenues                                    $   1,422,859           $  1,475,878         $   657,842
    Expenses                                         (252,827 )             (228,657 )          (274,289 )
    Provision for write-down of assets                     --                     --            (356,719 )
                                          --------------------     ------------------  ------------------

    Income from continuing operations               1,170,032              1,247,221              26,834
                                          --------------------     ------------------  ------------------

Discontinued operations:
    Revenues                                               --                 62,549             122,867
    Expenses                                          (15,827 )              (34,805 )           (36,076 )
    Provision for write-down of assets                     --                     --            (781,741 )
    Gain on disposal of real estate
      properties                                      413,666                269,791                  --
                                          --------------------     ------------------  ------------------
                                                      397,839                297,535            (694,950 )
                                          --------------------     ------------------  ------------------
Net Income                                      $   1,567,871           $  1,544,756        $   (668,116 )
                                          ====================     ==================  ==================
</TABLE>



         The Partnership  recognized  income totaling  $645,804 and $543,978 for
         the  years  ended  December  31,  2003 and  2002,  and a loss  totaling
         $136,021  for the year  ended  December  31,  2001,  from  these  joint
         ventures and the properties held as tenants-in-common with affiliates.

5.       Discontinued Operations

         In October 2001, Phoenix Restaurant Group, Inc. and its subsidiaries, a
         tenant of the Partnership, filed for bankruptcy protection and rejected
         the lease relating to the property in Mesquite,  Nevada. In March 2002,
         the  Partnership  sold the  property to a third party and  received net
         sales proceeds of approximately  $771,800. The Partnership had recorded
         provisions  for write-down of assets of $465,915 and $28,644 during the
         years 2001 and 2000,  respectively.  No gain or loss was  recognized in
         2002 relating to the sale.

         In May and June 2002, the Partnership sold its properties in Knoxville,
         Tennessee  and Wilmette,  Illinois to third parties and received  total
         net sales  proceeds of  approximately  $2,727,800  resulting in a total
         gain of approximately $285,700.

         During November 2003, the Partnership  identified for sale its property
         in Warner Robins,  Georgia.  As a result, the property was reclassified
         from real estate  properties with operating  leases to real estate held
         for sale. The  reclassified  assets were recorded at the lower of their
         carrying  amounts or fair value,  less cost to sell.  During June 2003,
         subsequent  to  the  tenant  vacating  the  property,  the  Partnership
         recorded  a  provision  for  write-down  of  assets  of  $213,000.  The
         provision  represented the difference between the carrying value of the
         property and its estimated fair value.

         The   financial   results  for  these   properties   are  reflected  as
         discontinued  operations in the accompanying financial statements.  The
         operating results of discontinued operations are as follows:





<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


5.       Discontinued Operations - Continued

<TABLE>

                                                                            Year Ended December 31,
                                                                    2003              2002              2001
                                                                --------------    -------------     -------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>


        Rental revenues                                              $  46,820        $ 222,631        $  321,966
        Other income                                                        --            2,719             1,079
        Expenses                                                       (18,080 )        (40,971 )         (77,691 )
        Provision for write-down of assets                            (213,000 )             --          (465,915 )
                                                                --------------    -------------     -------------

        Income (loss) from discontinued operations                  $ (184,260 )      $ 184,379        $ (220,561 )
                                                                ==============    =============     =============
</TABLE>



6.       Allocations and Distributions

         From inception  through  December 31, 1999,  distributions  of net cash
         flow,  as  defined  in  the  limited   partnership   agreement  of  the
         Partnership,  were made 95% to the limited partners and five percent to
         the general partners;  provided, however, that for any particular year,
         the five  percent  of net cash flow to be  distributed  to the  general
         partners was  subordinated  to receipt by the limited  partners in that
         year of an eight  percent  cumulative,  noncompounded  return  on their
         aggregate  invested capital  contributions  (the "Limited  Partners" 8%
         Return").

         From  inception  through  December  31,  1999,  generally,  net  income
         (determined   without  regard  to  any  depreciation  and  amortization
         deductions  and  gains  and  losses  from the sale of  properties)  was
         allocated  between the limited partners and the general partners first,
         in an  amount  not to  exceed  the net  cash  flow  distributed  to the
         partners  attributable to such year in the same proportions as such net
         cash flow is distributed;  and thereafter,  99% to the limited partners
         and  one  percent  to  the  general   partners.   All   deductions  for
         depreciation  and  amortization  were  allocated  99%  to  the  limited
         partners and one percent to the general partners.

         From inception  through  December 31, 1999, net sales proceeds from the
         sale of a property not in liquidation of the Partnership generally were
         distributed  first to the limited  partners in an amount  sufficient to
         provide them with the return of their invested  capital  contributions,
         plus their cumulative Limited Partners' 8% Return. The general partners
         then  received  a return of their  capital  contributions  and,  to the
         extent  previously  subordinated and unpaid, a five percent interest in
         all net cash flow distributions.  Any remaining net sales proceeds were
         distributed 95% to the limited partners and five percent to the general
         partners.





<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                         NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


6.       Allocations and Distributions - Continued

         Any  gain  from  the  sale of a  property,  not in  liquidation  of the
         Partnership,  was in general, allocated in the same manner as net sales
         proceeds are distributable.  Any loss was, in general, allocated first,
         on a pro rata basis to the  partners  with  positive  balances in their
         capital  accounts;  and thereafter,  95 percent to the limited partners
         and five percent to the general partners.

         Generally,  net sales  proceeds from a liquidating  sale of properties,
         will be used in the following order: (i) first to pay and discharge all
         of  the  Partnership's   liabilities  to  creditors,  (ii)  second,  to
         establish  reserves that may be deemed necessary for any anticipated or
         unforeseen liabilities or obligations of the Partnership,  (iii) third,
         to pay all of the Partnership's liabilities, if any, to the general and
         limited partners,  (iv) fourth,  after allocations of net income, gains
         and/or  losses,  to distribute  to the partners  with positive  capital
         accounts  balances,  in  proportion  to such  balances,  up to  amounts
         sufficient  to  reduce  such  positive   balances  to  zero,   and  (v)
         thereafter,  any funds  remaining  shall then be distributed 95% to the
         limited partners and five percent to the general partners.

         Effective  January 1, 2000, the general  partners waived their right to
         receive  future  distributions  from the  Partnership,  including  both
         distributions  of operating cash flow and  distributions of liquidation
         proceeds,   to  the  extent   that  the   cumulative   amount  of  such
         distributions would exceed the balance in the general partners' capital
         account as of December  31,  1999.  Accordingly,  for years  commencing
         January  1,  2000 and  after,  the  Partnership's  net  income  will be
         allocated entirely among the limited partners.  However,  if losses are
         allocated to the general  partners in a year, an amount of income equal
         to the sum of such losses may be allocated  to the general  partners in
         succeeding years. Accordingly,  the general partners were not allocated
         any net income and did not receive any  distributions  during the years
         ended December 31, 2003, 2001 and 2001.

         During each of the years ended  December 31, 2003,  2001, and 2001, the
         Partnership   declared   distributions   to  the  limited  partners  of
         $2,400,000.  No distributions have been made to the general partners to
         date.






<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


7.       Income Taxes

         The following is a reconciliation of net income for financial reporting
         purposes to net income for federal  income tax  purposes  for the years
         ended December 31:
<TABLE>

                                                                       2003            2002            2001
                                                                  ---------------  --------------  --------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

          Net income for financial reporting purposes                $ 1,607,414     $ 1,726,112      $  969,196

          Effect of timing differences relating to depreciation           61,215          60,987          37,122

          Effect of timing differences relating to amortization               --              --            (848 )

          Direct financing leases recorded as operating
            leases for tax reporting purposes                             10,393          14,085          35,649


          Effect of timing differences relating to equity in
            earnings of unconsolidated joint ventures                   (267,447 )       (88,917 )       426,474

          Accrued rental income                                          (20,155 )       (37,857 )      (105,700 )

          Rents paid in advance                                              497          23,560         (14,806 )

          Deferred rental income                                         (11,716 )       (11,912 )       (15,948 )

          Effect of timing differences relating to allowance
            for doubtful accounts                                         43,516        (286,567 )        31,981

          Effect of timing differences relating to gains/losses
            on real estate property sales                                     --        (618,059 )      (725,184 )

          Provision for write-down of assets                             213,000         456,000         505,491

          Other                                                             (290 )            --              --
                                                                  ---------------  --------------  --------------

          Net income for federal income tax purposes                 $ 1,636,427     $ 1,237,432     $ 1,143,427
                                                                  ===============  ==============  ==============
</TABLE>



<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


8.       Related Party Transactions

         One of the individual general partners, James M. Seneff, Jr., is one of
         the principal  shareholders of CNL Holdings,  Inc. The other individual
         general partner, Robert A. Bourne, serves as President and Treasurer of
         CNL Financial  Group,  Inc., a wholly owned subsidiary of CNL Holdings,
         Inc. CNL APF Partners,  LP, a wholly owned subsidiary of CNL Restaurant
         Properties, Inc. (formerly known as CNL American Properties Fund, Inc.)
         served as the  Partnership's  advisor  until  January 1, 2002,  when it
         assigned its rights and obligations under a management agreement to RAI
         Restaurants,  Inc.  (the  "Advisor")  The  Advisor  is a  wholly  owned
         subsidiary  of  CNL  Restaurant   Properties,   Inc.  ("CNL-RP").   The
         individual general partners are stockholders and directors of CNL-RP.

         The Advisor provides services  pursuant to a management  agreement with
         the partnership. In connection therewith, the Partnership agreed to pay
         certain  Advisor  management  fees of one  percent  of the sum of gross
         revenues  from  properties  wholly  owned  by the  Partnership  and the
         Partnership's  allocable  share of gross revenues from joint  ventures.
         Any  portion  of the  Management  fee  not  paid  is  deferred  without
         interest. The Partnership incurred management fees of $23,448, $24,452,
         and $21,315,  for the years ended  December 31, 2003,  2002,  and 2001,
         respectively.

         The Advisor is also entitled to receive a deferred,  subordinated  real
         estate disposition fee, payable upon the sale of one or more properties
         based on the lesser of one-half of a competitive real estate commission
         or  three  percent  of the  sales  price  if  the  Advisor  provides  a
         substantial amount of services in connection with the sale. However, if
         the sales  proceeds are reinvested in a replacement  property,  no such
         real estate  disposition  fees will be incurred until such  replacement
         property  is sold  and the net  sales  proceeds  are  distributed.  The
         payment  of the real  estate  disposition  fee is  subordinated  to the
         receipt by the limited partners of their aggregate 8% Preferred Return,
         plus their adjusted capital  contributions.  No deferred,  subordinated
         real estate disposition fees have been incurred since inception.

         During  2001,   Phoenix   Restaurant  Group,  Inc.  ("PRG")  filed  for
         bankruptcy  and  rejected  one of  the  two  leases  it  had  with  the
         Partnership.  The other lease was held with an affiliate of the general
         partners, as tenants-in-common.  The Partnership owns a 27.42% interest
         in the tenancy in common.  In May 2002, the  bankruptcy  court assigned
         this lease,  relating to the property in Corpus Christi,  Texas to RAI,
         LLC,  an  affiliate  of the  general  partners.  All other  lease terms
         remained the same. In connection with this lease, the tenancy in common
         recognized  rental  revenues of  approximately  $190,600  and  $127,800
         during the years ended  December 31, 2003 and 2002,  respectively.  The
         Partnership  recognized  its pro-rata share of this amount in equity in
         earnings of joint ventures in the accompanying financial statements.

         In June 2002, the  Partnership  acquired a property in Houston,  Texas,
         from CNL Funding 2001-A, LP, for approximately $1,364,200. In addition,
         in June 2002,  Katy Joint  Venture  acquired a property in Katy,  Texas
         from CNL Funding 2001-A,  LP. CNL Funding 2001-A,  LP had purchased and
         temporarily  held title to the  properties in order to  facilitate  the
         acquisition of the properties by the Partnership and the Joint Venture.
         The  purchase  price  paid by the  Partnership  and the  Joint  Venture
         represented the costs incurred by CNL Funding 2001-A, LP to acquire and
         carry the properties.







<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


8.       Related Party Transactions - Continued

         In September 2002, CNL Mansfield  Joint Venture  acquired a property in
         Arlington,  Texas from CNL Net Lease  Investors,  L.P.  ("NLI"),  at an
         approximate  cost of  $1,089,900.  During 2002,  and prior to the joint
         venture's  acquisition of this property,  CNL Financial LP Holding,  LP
         ("CFN") and CNL Net Lease Investors GP Corp. ("GP Corp")  purchased the
         limited   partner's   interest   and   general   partner's    interest,
         respectively,  of NLI. Prior to this  transaction,  an affiliate of the
         Partnership's  general partners owned a 0.1% interest in NLI and served
         as a general  partner of NLI.  The  original  general  partners  of NLI
         waived their rights to benefit from this  transaction.  The acquisition
         price paid by CFN for the limited  partner's  interest was based on the
         portfolio acquisition price. The joint venture acquired the property in
         Arlington,  Texas  at  CFN's  cost  and  did  not  pay  any  additional
         compensation  to CFN for the  acquisition  of the  property.  Each  CNL
         entity is an affiliate of the Partnership's general partners.

         During the years ended  December 31, 2003,  2002, and 2001, the Advisor
         and its affiliates provided accounting and administrative services. The
         Partnership incurred $114,200,  $149,801,  and $189,320,  for the years
         ended  December  31,  2003,  2002,  and  2001,  respectively,  for such
         services.

         The amount due related  parties at December  31, 2003 and 2002  totaled
         $11,242 and $26,600, respectively.

9.       Concentration of Credit Risk

         The following  schedule  presents total rental revenues from individual
         lessees,  each  representing  more  than ten  percent  of total  rental
         revenues  (including the  Partnership's  share of total rental revenues
         from the joint  ventures and the properties  held as  tenants-in-common
         with affiliates of the general  partners),  for each of the years ended
         December 31:
<TABLE>

                                                                 2003               2002              2001
                                                             --------------    ---------------    -------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

         Golden Corral Corporation                               $ 598,801          $ 598,592        $ 555,303
         National Restaurant Enterprises, Inc.                     350,337            424,696          424,696
         Taco Cabana and Carrols Corp (entities
              under common control)                                334,988                N/A              N/A
         RTM Indianapolis and RTM Southwest
              Texas, Inc. (entities under common
              control)                                             263,801            262,169          264,878
         Jack in the Box Inc. and
              Jack in the Box Eastern Division, L.P.
              (entities under common control)                          N/A                N/A          324,397
</TABLE>



<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


9.       Concentration of Credit Risk - Continued

         In addition, the following schedule presents total rental revenues from
         individual  restaurant chains,  each representing more than ten percent
         of total rental revenues  (including the  Partnership's  share of total
         rental  revenues  from the joint  ventures and the  properties  held as
         tenants-in-common with affiliates of the General Partners), for each of
         the years ended December 31:
<TABLE>

                                                            2003               2002                2001
                                                       ---------------    ---------------     ---------------

<S>     <C>    <C>    <C>    <C>    <C>    <C>
          Golden Corral Buffet and Grill                    $ 598,801          $ 598,592          $  555,303
          Burger King                                         386,101            463,478             472,109
          Taco Cabana                                         299,225                N/A                 N/A
          Arby's                                              281,892            279,905             282,266
          Jack in the Box                                         N/A                N/A             324,397
</TABLE>

         The  information   denoted  by  N/A  indicates  that  for  each  period
         presented, the tenant or group of affiliated tenants, and the chain did
         not represent more than ten percent of the  Partnership's  total rental
         revenues.

         Although  the  Partnership's   properties  are  geographically  diverse
         throughout the United States and the  Partnership's  lessees  operate a
         variety of  restaurant  concepts,  default  by any of these  lessees or
         restaurant chains will  significantly  impact the results of operations
         of the  Partnership  if the  Partnership  is not able to  re-lease  the
         properties in a timely manner.

10.      Selected Quarterly Financial Data

         The following table presents  selected  unaudited  quarterly  financial
         data for each full quarter during the years ended December 31, 2003 and
         2002:
<TABLE>

                     2003 Quarter                    First         Second        Third         Fourth           Year
        ---------------------------------------    -----------    ----------   ----------     ----------    -------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

        Continuing operations (1)
             Revenues                               $ 383,205      $442,982     $430,852       $440,316      $ 1,697,355
             Equity in earnings of joint              129,034       128,919      256,483        131,368          645,804
        ventures
             Income from continuing
               operations                             344,999       443,535      559,108        444,032        1,791,674

        Discontinued operations (1)
             Revenues                                  22,956        30,332       (6,468  )          --           46,820
             Income (loss) from and gain
             (Loss) on the disposal of
               discontinued operations                 19,440      (185,074  )   (10,143  )      (8,483  )      (184,260  )

        Net income                                    364,439       258,461      548,965        435,549        1,607,414

        Income (loss) per limited partner unit:
             Continuing operations                    $  0.11       $  0.15      $  0.19        $  0.15         $   0.60
             Discontinued operations                     0.01         (0.06  )     (0.01  )          --            (0.06  )
                                                   -----------    ----------   ----------     ----------    -------------
             Total                                    $  0.12       $  0.09      $  0.18        $  0.15          $  0.54
                                                   ===========    ==========   ==========     ==========    =============
</TABLE>




<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001

10.      Selected Quarterly Financial Data - Continued

<TABLE>

                    2002 Quarter                     First         Second        Third         Fourth           Year
      -----------------------------------------    -----------    ----------   ----------     ----------    --------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

      Continuing Operations (1):
           Revenues                                 $ 428,726      $421,447     $459,494       $407,070        $1,716,737
           Equity in earnings of joint
           ventures                                    76,861       163,823      172,098        131,196           543,978
           Income (loss) from continuing
               operations (2)                         352,860       446,015      503,358        (46,177  )      1,256,056

      Discontinued Operations (1):
           Revenues                                    95,189        79,785       24,703         25,673           225,350
           Income from and gain on the
               disposal ofdiscontinued
               operations                              73,743       358,874       20,687         16,752           470,056

      Net income                                      426,603       804,888      524,045        (29,424  )      1,726,112

      Income (loss) per limited partner unit:
          Continuing operations                       $  0.12        $ 0.15      $  0.17        $ (0.02  )       $   0.42
          Discontinued operations                        0.02          0.12           --           0.02              0.16
                                                   -----------    ----------   ----------     ----------    --------------
                                                      $  0.14        $ 0.27      $  0.17         $   --          $   0.58
                                                   ===========    ==========   ==========     ==========    ==============
</TABLE>

          (1)    Certain  items  in  the  quarterly  financial  data  have  been
                 reclassified  to  conform  to  the  2003  presentation.   These
                 reclassifications  had no effect on net income.  The results of
                 operations  relating to properties that were either  identified
                 for sale and disposed of  subsequent to January 1, 2002 or were
                 classified  as  held  for  sale as of  December  31,  2003  are
                 reported as discontinued  operations for all periods presented.
                 The  results  operations   relating  to  properties  that  were
                 identified   for  sale  as  of  December   31,  2001  but  sold
                 subsequently are reported as continuing operations.

          (2)    In December  2002,  the  Partnership  recorded  provisions  for
                 write-down of assets in the amount of $456,000  relating to the
                 Properties in Harvey and Chicago Ridge,  Illinois,  as a result
                 of the AmeriKing Corporation bankruptcy.


<PAGE>


Item  9. Changes  in and  Disagreements  with  Accountants  on  Accounting  and
         Financial Disclosure

         None.


Item 9A. Controls and Procedures

         The  General  Partners  maintain  a  set  of  disclosure  controls  and
procedures  designed to ensure that information  required to be disclosed in the
Partnership's  filings  under the  Securities  Exchange Act of 1934 is recorded,
processed,  summarized  and reported  within the time  periods  specified in the
Securities and Exchange  Commission's  rules and forms. The principal  executive
and  financial  officers of the  corporate  general  partner have  evaluated the
Partnership's  disclosure  controls and  procedures  as of the end of the period
covered  by this  Annual  Report  on Form  10-K and have  determined  that  such
disclosure controls and procedures are effective.

         There was no change in internal  control over financial  reporting that
occurred during the most recent fiscal quarter that has materially affected,  or
is  reasonably  likely to materially  affect,  internal  control over  financial
reporting.


                                    PART III


Item 10.  Directors and Executive Officers of the Registrant

         The General Partners of the Registrant are James M. Seneff, Jr., Robert
A.  Bourne  and CNL  Realty  Corporation,  a Florida  corporation.  The  General
Partners  manage  and  control  the  Partnership's   affairs  and  have  general
responsibility   and  the  ultimate  authority  in  all  matters  affecting  the
Partnership's  business.  The  Partnership  has  available  to it the  services,
personnel and  experience of CNL-RP,  CCM, CNL Financial  Group,  Inc. and their
affiliates, all of which are affiliates of the General Partners.

         James M. Seneff, Jr., age 57. Since 1971, Mr. Seneff has been active in
the  acquisition,  development,  and  management  of real estate  projects  and,
directly or through an  affiliated  entity,  has served as a general  partner or
co-venturer in over 100 real estate  ventures.  These ventures have involved the
financing,  acquisition,   construction,  and  leasing  of  restaurants,  office
buildings,  apartment  complexes,  hotels, and other real estate. Mr. Seneff has
served as Director and Chairman of the Board of CNL-RP, a public,  unlisted real
estate investment trust since 1994. Mr. Seneff served as Chief Executive Officer
of CNL-RP from 1994 through August 1999 and as Co-Chief  Executive  Officer from
December 2000 through September 2003. Mr. Seneff served as Chairman of the Board
and  Chief  Executive  Officer  of  CNL  Fund  Advisors,   Inc.,   formerly  the
Partnership's  advisor,  from  its  inception  in 1990  until it  merged  with a
wholly-owned  subsidiary  of CNL-RP in  September  1999,  and in June 2000,  was
re-elected  to those  positions of CNL Fund  Advisors,  Inc. CNL Fund  Advisors,
Inc.,  formerly CNL  Institutional  Advisors,  Inc., is a registered  investment
advisor. Mr. Seneff is a principal stockholder of CNL Holdings, Inc., the parent
company of CNL Financial Group, Inc., a diversified real estate company, and has
served as a Director,  Chairman of the Board and Chief Executive  Officer of CNL
Financial Group, Inc. since 1973. CNL Financial Group, Inc. is and is the parent
company, either directly or indirectly through subsidiaries,  of CNL Real Estate
Services,  Inc.,  CNL Capital  Markets,  Inc.,  CNL  Investment  Company and CNL
Securities  Corp.,  all of which are  engaged  in the  business  of real  estate
finance.  Mr.  Seneff also serves as a Director and Chairman of the Board of CNL
Hospitality  Properties,  Inc., a public, unlisted real estate investment trust;
and served as Chief Executive Officer of CNL Hospitality  Properties,  Inc. from
its inception in 1997 until 2003 and served as Co-Chief  Executive  Officer from
February 2003 until May 1, 2003.  Mr. Seneff has served as Chairman of the Board
of CNL Hospitality Corp., the advisor to CNL Hospitality Properties, Inc., since
its inception in 1997.  Mr. Seneff also served as Chief  Executive  Officer from
its inception in 1997 through  February 2003,  and currently  serves as Co-Chief
Executive Officer of CNL Hospitality Corp. Mr. Seneff has served as Director and
Chairman  of the Board of CNL  Retirement  Corp.  since 1997 and served as Chief
Executive Officer of CNL Retirement Corp. from 1997 through 2003. CNL Retirement
Corp. is the advisor to CNL Retirement Properties, Inc., a public, unlisted real
estate  investment trust. Mr. Seneff has also served as Director and Chairman of
the Board of Commercial Net Lease Realty,  Inc., a public real estate investment
trust  that is listed on the New York Stock  Exchange,  since 1992 and served as
Chief Executive  Officer of Commercial Net Lease Realty,  Inc. from 1992 through
February 2004. Mr. Seneff has served as a Director,  Chairman of the Board,  and
Chief Executive Officer of CNL Securities Corp. since its formation in 1979; CNL
Investment  Company  since  1990;  and  CNL  Institutional  Advisors,   Inc.,  a
registered  investment  advisor for pension  plans,  since 1990.  Mr. Seneff has
served as Chairman of the Board and Chief  Executive  Officer of CNL  Commercial
Finance,  Inc.  since 2000.  Mr.  Seneff also serves as Chairman of the Board of
CNLBank, an independent,  state-chartered commercial bank. Mr. Seneff previously
served on the Florida State Commission on Ethics and is a former member and past
Chairman of the State of Florida Investment  Advisory Council,  which recommends
to the Florida Board of Administration  investments for various Florida employee
retirement  funds.  The Florida  Board of  Administration,  Florida's  principal
investment advisory and money management agency,  oversees the investment of the
Florida  state  retirement  plan.  Mr.  Seneff  received  his degree in Business
Administration from Florida State University in 1968.

         Robert A.  Bourne,  age 56. Mr.  Bourne has  participated  as a general
partner  or  co-venturer  in over  100  real  estate  ventures  involved  in the
financing,  acquisition,   construction,  and  leasing  of  restaurants,  office
buildings,  apartment  complexes,  hotels, and other real estate. Mr. Bourne has
served as a Director and Vice  Chairman of the Board of CNL-RP  since 1994.  Mr.
Bourne also served as President of CNL-RP from 1994  through  February  1999 and
served as Treasurer  from  February  1999 through  August 1999 and from May 1994
through December 1994. Mr. Bourne served in various executive positions with CNL
Fund Advisors, Inc. prior to its merger with a wholly-owned subsidiary of CNL-RP
including,  President from 1994 through  September  1997, and Director from 1994
through  August  1999.  Mr.  Bourne  serves as  President  and  Treasurer of CNL
Financial Group, Inc. Mr. Bourne serves as Director,  Vice Chairman of the Board
and  Treasurer  and from  1997  until  June  2002  served  as  President  of CNL
Hospitality  Properties,  Inc. and as Director,  President  and Treasurer of CNL
Hospitality  Corp.  Mr.  Bourne  also serves as Director  and  Treasurer  of CNL
Retirement  Properties,  Inc.  and as Director and  Treasurer of CNL  Retirement
Corp. Mr. Bourne serves as a Director of CNLBank.  Mr. Bourne has also served as
a Director since 1992, Vice Chairman of the Board since February 1996, Secretary
and Treasurer  from February  1996 through  1997,  and President  from July 1992
through February 1996, of Commercial Net Lease Realty, Inc. Mr. Bourne serves as
Director, President and Treasurer for various affiliates of CNL Financial Group,
Inc.  including,   CNL  Investment   Company,   CNL  Securities  Corp.  and  CNL
Institutional  Advisors,  Inc. Mr. Bourne began his career as a certified public
accountant  employed by Coopers & Lybrand,  Certified Public  Accountants,  from
1971 through  1978,  where he attained the position of Tax Manager in 1975.  Mr.
Bourne  graduated from Florida State University in 1970 where he received a B.A.
in Accounting, with honors.

         Curtis B. McWilliams, age 48. Mr. McWilliams has served as President of
CNL-RP since May 2001 and as Chief  Executive  Officer of CNL-RP since September
2003.  Mr.  McWilliams  served as  Co-Chief  Executive  Officer  of CNL-RP  from
December 2000 through  September 2003 and served as Chief Executive Officer from
September 1999 through  December 2000. Mr.  McWilliams  also served as President
and Chief  Executive  Officer of CNL  Franchise  Network  Corp.,  a wholly owned
subsidiary  of CNL-RP  since  August 2002 and served as President of CNL-RP from
February 1999 until  September  1999 and as Executive  Vice  President of CNL-RP
from 1997 through  February  1999.  Mr.  McWilliams  served as an Executive Vice
President of CNL  Financial  Group,  Inc. from the time he joined the company in
April 1997 until September 1999. Mr.  McWilliams served as President of CNL Fund
Advisors,  Inc. and CNL Financial  Services,  Inc., a corporation engaged in the
business of real estate financing, from April 1997 until the acquisition of such
entities  by  wholly  owned  subsidiaries  of  CNL-RP in  September  1999.  From
September 1983 through March 1997, Mr.  McWilliams was employed by Merrill Lynch
& Co. The  majority of his career at Merrill  Lynch & Co. was in the  Investment
Banking division where he served as a Managing Director. Mr. McWilliams received
a B.S.E. in Chemical  Engineering from Princeton University in 1977 and a Master
of Business  Administration  degree  with a  concentration  in finance  from the
University of Chicago in 1983.

         Steven  D.  Shackelford,  age  40.  Mr.  Shackelford  was  promoted  to
Executive  Vice  President  and Chief  Operating  Officer of CNL-RP in September
2003. Mr.  Shackelford has also served as Chief Financial  Officer since January
1997.  He served as Senior Vice  President  of CNL-RP from  January 1997 through
July 2000, when he was promoted to Executive Vice President. Mr. Shackelford has
also served as Secretary and Treasurer of CNL-RP since  September  1999. He also
served as Chief Financial Officer of CNL Fund Advisors, Inc. from September 1996
to September  1999.  From March 1995 to July 1996, Mr.  Shackelford was a senior
manager in the national office of Price  Waterhouse LLP where he was responsible
for advising  foreign  clients  seeking to raise capital and a public listing in
the United  States.  From  August  1992 to March  1995,  he was a manager in the
Paris,  France  office  of  Price  Waterhouse,  serving  several  multi-national
clients.  Mr. Shackelford was an audit staff and senior from 1986 to 1992 in the
Orlando, Florida office of Price Waterhouse. Mr. Shackelford received a Bachelor
of  Arts  degree  in  Accounting,   with  honors,   and  a  Master  of  Business
Administration  degree from Florida State  University and is a certified  public
accountant.

         Thomas Arasi, age 46. Mr. Arasi has served as President of CCM since it
was formed in July 2003 to provide  strategic  advisory  services to the General
Partners. He has served in various consulting capacities to CNL Hospitality Corp
and other CNL affiliates  since January 2003. Since November 2001 he has been an
independent  consultant  working  for a  variety  of  operating  and  investment
companies  in the  hospitality  industry.  Until  October  2001,  Mr.  Arasi was
President & Chief Executive  Officer,  and a member of the Board of Directors of
Lodgian,  Inc., a New York Stock  Exchange  traded  company,  one of the largest
independent hotel  owner/operators in North America, with hotel properties under
most brand names  including  Marriott,  Courtyard by Marriott,  Fairfield Inn by
Marriott,  Crowne  Plaza,  Holiday Inn,  Hilton,  and  Radisson.  From June 1997
through  November 2000,  Mr. Arasi was a member of the Management  Committee and
held  several top  operating  positions  with Bass Hotels & Resorts,  one of the
leading international owners, operators and franchisors of hotels, most recently
serving as President, Bass Hotels & Resort--The Americas. Mr. Arasi was formerly
President of Tishman  Hotel  Corporation,  Vice  President of Salomon  Brothers,
Inc.,  in New York,  Tokyo and Los Angeles  and held  positions  with  Sheraton,
Westin and HVS  International.  Mr. Arasi  graduated from Cornell  University in
January  1981,  where he received a  Bachelor's  degree in Hotel and  Restaurant
Administration.

Section 16(a) Beneficial Ownership Reporting Compliance

         Section  16(a) of the Exchange Act requires the General  Partners,  the
officers of the  corporate  General  Partner,  and persons who own more than ten
percent  of  a  registered  class  of  the   Partnership's   equity   securities
(collectively,  the  "Reporting  Persons"),  to file  reports of  ownership  and
changes in  ownership  on Forms 3, 4 and 5 with the SEC.  Reporting  Persons are
required by SEC regulation to furnish the  Partnership  with copies of all Forms
3, 4 and 5 that they file.

         Based  solely on the  General  Partners'  review of the  copies of such
forms the  Partnership  has  received and written  representations  from certain
Reporting  Persons  that they  were not  required  to file  Forms 5 for the last
fiscal year, the General  Partners  believe that all Reporting  Persons complied
with all filing  requirements  applicable  to them with respect to  transactions
during fiscal 2003.

Code of Business Conduct

         The  Partnership  does not have  employees  and,  accordingly,  has not
adopted a code of business  conduct  applicable  exclusively to the Partnership.
However,  employees of the General Partners or their  affiliates,  including the
individual  General Partners,  are bound by the Code of Business Conduct adopted
November 11, 2003 by CNL Holdings, Inc. Separately, the employees of the Advisor
are bound by the similar  Code of  Business  Conduct  adopted by CNL  Restaurant
Properties,  Inc. Each of these codes of business conduct will be made available
to any person who writes the Partnership requesting a copy.

Audit Committee Financial Expert

         Due to its organization as a limited partnership,  the Partnership does
not  have  an  audit   committee  that  is  responsible   for   supervising  the
Partnership's  relationship with its independent auditors.  For the Partnership,
this role is performed by the General Partners. Based on his previous service as
the principal  financial officer of companies with businesses similar to that of
the  Partnership,  Robert  A.  Bourne,  one of the  General  Partners,  has  the
requisite  experience to be considered an "audit committee  financial expert" as
defined  in  the  rules  under  the  Securities  Exchange  Act of  1934,  if the
Partnership  had an audit  committee.  As a General  Partner,  Mr. Bourne is not
independent of the Partnership.


Item 11. Executive Compensation

         Other than as  described in Item 13, the  Partnership  has not paid and
does not intend to pay any executive compensation to the General Partners or any
of their affiliates.  There are no compensatory plans or arrangements  regarding
termination of employment or change of control.



<PAGE>


Item 12. Security  Ownership of Certain  Beneficial  Owners and  Management and
         Related Stockholder Matters

         As of March 12,  2004,  no person was known to the  Registrant  to be a
beneficial owner of more than five percent of the Units.

         The following  table sets forth,  as of March 12, 2004,  the beneficial
ownership interests of the General Partners in the Registrant.
<TABLE>

                    Title of Class                          Name of Partner                  Percent of Class
<S>     <C>    <C>    <C>    <C>    <C>    <C>

           General Partnership Interests               James M. Seneff, Jr.                            45%
                                                       Robert A. Bourne                                45%
                                                       CNL Realty Corporation                          10%
                                                                                                   --------
                                                                                                      100%
                                                                                                   ========
</TABLE>

         Neither the General  Partners,  nor any of their  affiliates,  owns any
interest in the Registrant, except as noted above.

         The Partnership does not have any equity compensation plans.




<PAGE>


Item 13.  Certain Relationships and Related Transactions

         The  table  below   summarizes  the  types,   recipients,   methods  of
computation and amounts of compensation,  fees and distributions paid or payable
by the  Partnership  to the General  Partners and their  affiliates for the year
ended  December 31, 2003,  exclusive of any  distributions  to which the General
Partners or their  affiliates  may be entitled by reason of their  purchase  and
ownership of Units.
<TABLE>

                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
         and Recipient                         Method of Computation                  Ended December 31, 2003
---------------------------------      --------------------------------------      ------------------------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Reimbursement  to affiliates for       Operating  expenses are reimbursed at       Accounting    and
operating expenses                     the  lower  of  cost  or  90%  of the       administrative     services:
                                       prevailing  rate at which  comparable       $114,200
                                       services  could have been obtained in
                                       the     same     geographic     area.
                                       Affiliates  of the  General  Partners
                                       from  time  to  time  incur   certain
                                       operating  expenses  on behalf of the
                                       Partnership     for     which     the
                                       Partnership       reimburses      the
                                       affiliates without interest.

Annual    management    fee   to       One  percent  of  the  sum  of  gross       $23,448
affiliates                             revenues   (excluding   noncash   and
                                       lease accounting adjustments) from
                                       Properties wholly owned by the
                                       Partnership plus the Partnership's
                                       allocable share of gross revenues of
                                       joint ventures in which the Partnership
                                       is a co-venturer. The management fee,
                                       which will not exceed competitive fees
                                       for comparable services in the same
                                       geographic area, may or may not be taken,
                                       in whole or in part as to any year, in
                                       the sole discretion of the affiliates.
                                       All of any portion of the management fee
                                       not taken as to any fiscal year shall be
                                       deferred without interest and may be
                                       taken in such other fiscal year as the
                                       affiliates shall determine.

</TABLE>



<PAGE>

<TABLE>


                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
         and Recipient                         Method of Computation                  Ended December 31, 2003
---------------------------------      --------------------------------------      ------------------------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Deferred,    subordinated   real       A deferred,  subordinated real estate       $-0-
estate  disposition  fee payable       disposition  fee,  payable  upon sale
to affiliates.                         of  one  or  more  Properties,  in an
                                       amount equal to the lesser of (i)
                                       one-half of a competitive real estate
                                       commission, or (ii) three percent of the
                                       sales price of such Property or
                                       Properties. Payment of such fee shall be
                                       made only if affiliates of the General
                                       Partners provide a substantial amount of
                                       services in connection with the sale of a
                                       Property or Properties and shall be
                                       subordinated to certain minimum returns
                                       to the Limited Partners. However, if the
                                       net sales proceeds are reinvested in a
                                       replacement Property, no such real estate
                                       disposition fee will be incurred until
                                       such replacement Property is sold and the
                                       net sales proceeds are distributed.

General   Partners'    deferred,       A deferred,  subordinated share equal       $-0-
subordinated       share      of       to  five   percent   of   Partnership
Part-nership net cash flow             distributions   of  net  cash   flow,
                                       subordinated   to   certain   minimum
                                       returns to the Limited Partners.

General   Partners'    deferred,       A deferred,  subordinated share equal       $-0-
subordinated       share      of       to  five   percent   of   Partnership
Part-nership  net sales proceeds       distributions   of  such  net   sales
from  a  sale  or  sales  not in       proceeds,   subordinated  to  certain
liquidation of the Partnership         minimum   returns   to  the   Limited
                                       Partners

General   Partners'   share   of       Distributions  of net sales  proceeds       $-0-
Partnership  net sales pro-ceeds       from   a    sale    or    sales    of
from  a   sale   or   sales   in       substantially      all     of     the
liquidation of the Partnership         Partnership's    assets    will    be
                                       distributed in the following order or
                                       priority: (i) first, to pay all debts and
                                       liabilities of the Partnership and to
                                       establish reserves; (ii) second, to
                                       Partners with positive capital account
                                       balances, determined after the allocation
                                       of net income, net loss, gain and loss,
                                       in proportion to such balances, up to
                                       amounts sufficient to reduce such
                                       balances to zero; and (iii) thereafter,
                                       95% to the Limited Partners and 5% to the
                                       General Partners.

</TABLE>


<PAGE>


During 2001,  PRG filed for bankruptcy and rejected one of the two leases it had
with the Partnership.  The other lease was held with an affiliate of the General
Partners,  as  tenants-in-common.  The Partnership owns a 27.42% interest in the
tenancy in common.  In May 2002,  the  bankruptcy  court  assigned  this  lease,
relating to the property in Corpus  Christi,  Texas to RAI, LLC, an affiliate of
the General  Partners.  All other lease terms  remained the same.  In connection
with  this  lease,  the  tenancy  in  common   recognized   rental  revenues  of
approximately $190,600 and $127,800 during the years ended December 31, 2003 and
2002, respectively. The Partnership recognized its pro-rata share of this amount
in equity in  earnings of  unconsolidated  joint  ventures  in the  accompanying
financial statements.


Item 14.  Principal Accountant Fees and Services

The following  table  outlines the only fees paid or accrued by the  Partnership
for the audit and  other  services  provided  by the  Partnership's  independent
certified public  accountants,  PricewaterhouseCoopers  LLP, for the years ended
December 31:
<TABLE>

                                                    2003                                      2002
                                            ---------------------                     ---------------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Audit Fees (1)                                     $      11,423                              $      9,500
Tax Fees (2)                                               3,725                                     6,175
                                            ---------------------                     ---------------------
     Total                                         $      15,148                             $      15,675
                                            =====================                     =====================
</TABLE>


     (1) Audit  services  of  PricewaterhouseCoopers   LLP  for  2003  and  2002
         consisted  of  the  examination  of  the  financial  statements  of the
         Partnership and quarterly review of financial statements.

     (2) Tax Fees relates to tax consulting and compliance services.

Each of the  non-audit  services  described  above was  approved  by the General
Partners. Due to its organization as a limited partnership, the Partnership does
not have an audit committee.


                                     PART IV


Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a) The following documents are filed as part of this report.

         1.  Financial Statements

                  Report of Independent Certified Public Accountants

                  Balance Sheets at December 31, 2003 and 2002

                  Statements  of Income for the year ended  December  31,  2003,
                    2002, and 2001

                  Statements  of Partners'  Capital for the year ended  December
                    31, 2003, 2002 and 2001

                  Statements of Cash Flows for the year ended December 31, 2003,
                    2002, and 2001

                  Notes to Financial Statements


<PAGE>


         2.       Financial Statement Schedules

                  Schedule II - Valuation and Qualifying  Accounts for the years
                    ended December 31, 2003, 2002, and 2001

                  Schedule  III - Real Estate and  Accumulated  Depreciation  at
                    December 31, 2003

                  Notes  to  Schedule   III  -  Real   Estate  and   Accumulated
                    Depreciation at December 31, 2003

                  All other Schedules are omitted as the required information is
                    inapplicable  or is presented in the  financial  statements
                    or notes thereto.

         3.  Exhibits

                **3.1      Affidavit and  Certificate of Limited  Partnership of
                           CNL Income Fund XVII,  Ltd.  (Filed as Exhibit 3.2 to
                           the Registrant's Registration Statement on Form S-11,
                           No. 33-90998, incorporated herein by reference.)

                **3.2      Amended and Restated Agreement of Limited Partnership
                           of CNL Income Fund XVII,  Ltd.  (Included  as Exhibit
                           4.2 to  Form  10-K  filed  with  the  Securities  and
                           Exchange   Commission   on  March   21,   1996,   and
                           incorporated herein by reference.)

                **4.1      Affidavit and  Certificate of Limited  Partnership of
                           CNL Income Fund XVII,  Ltd.  (Included as Exhibit 3.2
                           to  Registration  Statement No.  33-90998-01  on Form
                           S-11 and incorporated herein by reference.)

                **4.2      Amended and Restated Agreement of Limited Partnership
                           of CNL Income Fund XVII,  Ltd.  (Included  as Exhibit
                           4.2 to  Form  10-K  filed  with  the  Securities  and
                           Exchange   Commission   on  March   21,   1996,   and
                           incorporated herein by reference.)

                **4.3      Form of Agreement  between CNL Income Fund XVII, Ltd.
                           and MMS Escrow and Transfer Agency,  Inc. and between
                           CNL  Income  Fund  XVIII,  Ltd.  and MMS  Escrow  and
                           Transfer  Agency,  Inc.  relating to the Distribution
                           Reinvestment  Plans  (Filed  as  Exhibit  4.4  to the
                           Registrant's Registration Statement on Form S-11, No.
                           33-90998, incorporated herein by reference.)

                **8.3      Opinion  of  Baker  &  Hostetler   regarding  certain
                           material   issues   relating   to  the   Distribution
                           Reinvestment  Plan  of CNL  Income  Fund  XVII,  Ltd.
                           (Filed as Exhibit 8.3 to  Amendment  No. Three to the
                           Registrant's Registration Statement on Form S-11, No.
                           33-90998, incorporated herein by reference.)

                **10.1     Management  Agreement  between  CNL Income Fund XVII,
                           Ltd. and CNL Fund Advisors, Inc. (Included as Exhibit
                           10.1 to Form  10-K  filed  with  the  Securities  and
                           Exchange   Commission   on  March   20,   1997,   and
                           incorporated herein by reference.)

                **10.2     Form of Joint Venture  Agreement  for Joint  Ventures
                           with Unaffiliated  Entities (Filed as Exhibit 10.2 to
                           the Registrant's Registration Statement on Form S-11,
                           No. 33-90998, incorporated herein by reference.)

                **10.3     Assignment  of  Management  Agreement  from  CNL Fund
                           Advisors, Inc. to CNL APF Partners, LP. (Including as
                           Exhibit  10.2 to Form 10-Q filed with the  Securities
                           and  Exchange  Commission  on August  13,  2001,  and
                           incorporated herein by reference.)

                **10.4     Form of Joint Venture  Agreement  for Joint  Ventures
                           with  Affiliated  Programs  (Filed as Exhibit 10.3 to
                           the Registrant's Registration Statement on Form S-11,
                           No. 33-90998, incorporated herein by reference.)

                **10.5     Form of Development  Agreement (Filed as Exhibit 10.5
                           to the  Registrant's  Registration  Statement on Form
                           S-11,   No.   33-90998,    incorporated   herein   by
                           reference.)

                **10.6     Form of  Indemnification  and Put Agreement (Filed as
                           Exhibit   10.6  to  the   Registrant's   Registration
                           Statement on Form S-11,  No.  33-90998,  incorporated
                           herein by reference.)

                **10.7     Form  of  Unconditional   Guarantee  of  Payment  and
                           Performance   (Filed   as   Exhibit   10.7   to   the
                           Registrant's Registration Statement on Form S-11, No.
                           33-90998, incorporated herein by reference.)

                **10.8     Form  of  Lease  Agreement  for  Existing  Restaurant
                           (Filed   as   Exhibit   10.8   to  the   Registrant's
                           Registration  Statement on Form S-11,  No.  33-90998,
                           incorporated herein by reference.)

                **10.9     Form  of  Lease   Agreement  for   Restaurant  to  be
                           Constructed   (Filed   as   Exhibit   10.9   to   the
                           Registrant's Registration Statement on Form S-11, No.
                           33-90998, incorporated herein by reference.)

                **10.10    Form of Premises  Lease for Golden Corral  Restaurant
                           (Filed   as   Exhibit   10.10  to  the   Registrant's
                           Registration  Statement on Form S-11,  No.  33-90998,
                           incorporated herein by reference.)

                **10.11    Form of Agreement  between CNL Income Fund XVII, Ltd.
                           and MMS Escrow and Transfer Agency,  Inc. and between
                           CNL  Income  Fund  XVIII,  Ltd.  and MMS  Escrow  and
                           Transfer  Agency,  Inc.  relating to the Distribution
                           Reinvestment  Plans  (Filed  as  Exhibit  4.4  to the
                           Registrant's Registration Statement on Form S-11, No.
                           33-90998, incorporated herein by reference.)

                **10.12    Form of Cotenancy  Agreement with Unaffiliated Entity
                           (Filed as Exhibit  10.12 to Amendment  No. One to the
                           Registrant's Registration Statement on Form S-11, No.
                           33-90998, incorporated herein by reference.)

                **10.13    Form of Cotenancy  Agreement with  Affiliated  Entity
                           (Filed as Exhibit  10.13 to Amendment  No. One to the
                           Registrant's Registration Statement on Form S-11, No.
                           33-90998, incorporated herein by reference.)

                **10.14    Form of Registered  Investor Advisor Agreement (Filed
                           as  Exhibit   10.14  to  Amendment  No.  One  to  the
                           Registrant's Registration Statement on Form S-11, No.
                           33-90998, incorporated herein by reference.)

                **10.15    Assignment  of  Management  Agreement  from  CNL  APF
                           Partners, LP to CNL Restaurants XVIII, Inc. (Included
                           as  Exhibit   10.15  to  Form  10-Q  filed  with  the
                           Securities  and  Exchange  Commission  on August  14,
                           2002, and incorporated herein be reference.)

                31.1       Certification of Chief Executive Officer of Corporate
                           General  Partner  Pursuant  to Rule 13a-14 as Adopted
                           Pursuant to Section 302 of the  Sarbanes-Oxley Act of
                           2002. (Filed herewith.)

                31.2       Certification of Chief Financial Officer of Corporate
                           General  Partner  Pursuant  to Rule 13a-14 as Adopted
                           Pursuant to Section 302 of the  Sarbanes-Oxley Act of
                           2002. (Filed herewith.)

                32.1       Certification of Chief Executive Officer of Corporate
                           General Partner Pursuant to 18 U.S.C. Section 1350 as
                           Adopted Pursuant to Section 906 of the Sarbanes-Oxley
                           Act of 2002. (Filed herewith.)

                32.2       Certification of Chief Financial Officer of Corporate
                           General Partner Pursuant to 18 U.S.C. Section 1350 as
                           Adopted Pursuant to Section 906 of the Sarbanes-Oxley
                           Act of 2002. (Filed herewith.)

          (b)   The  Registrant  filed no  reports on Form 8-K during the period
                October 1, 2003 through December 31, 2003.

          (c)   Not applicable.

          (d)   Other Financial Information.

                The   Partnership   is  required  to  file   audited   financial
                information of one of its tenants (Golden Corral Corporation) as
                a result of this  tenant  leasing  more than 20  percent  of the
                Partnership's total assets for the year ended December 31, 2003.
                Golden Corral Corporation is a privately-held  company,  and its
                financial  information  is not available to the  Partnership  to
                include in this filing. The Partnership will file this financial
                information  under  cover  of a Form  10-K/A  as  soon  as it is
                available.


                **previously filed


<PAGE>






                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the  undersigned,  thereunto duly  authorized,  on the 26th day of
March, 2004.

                                              CNL INCOME FUND XVII, LTD.

                                              By:  CNL REALTY CORPORATION
                                                   General Partner

                                                   /s/ Robert A. Bourne
                                                   -------------------------
                                                   ROBERT A. BOURNE, President


                                              By:  ROBERT A. BOURNE
                                                   General Partner

                                                   /s/ Robert A. Bourne
                                                   -------------------------
                                                   ROBERT A. BOURNE


                                              By:  JAMES M. SENEFF, JR.
                                                   General Partner

                                                   /s/ James M. Seneff, Jr.
                                                   -------------------------
                                                   JAMES M. SENEFF, JR.



<PAGE>





         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>

               Signature                                  Title                                  Date
<S>     <C>    <C>    <C>    <C>    <C>    <C>


/s/ Robert A. Bourne                     President,   Treasurer   and   Director            March 26, 2004
------------------------------------
Robert A. Bourne                         (Principal   Financial  and  Accounting
                                         Officer)

/s/ James M. Seneff, Jr.                 Chief  Executive  Officer and  Director            March 26, 2004
------------------------------------
James M. Seneff, Jr.                     (Principal Executive Officer)

</TABLE>



<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                  Years Ended December 31, 2003, 2002, and 2001

<TABLE>

                                                      Additions                           Deductions
                                          ----------------------------------      ----------------------------
                                                                                                          Collected
                                                                                                         or Deter-
                                   Balance at       Charged to       Charged to          Deemed           mined to       Balance
                                    Beginning       Costs and           Other           Uncollec-          be Col-       at End
  Year          Description          of Year         Expenses         Accounts            tible           lectible       of Year
----------    -----------------   --------------  ---------------  ----------------    ------------      ------------  ------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

  2001        Allowance for
                  doubtful
                  accounts (a)        $ 302,321       $   24,589        $  209,629 (b)   $ 249,972            $   --     $ 286,567
                                  ==============  ===============  ================    ============      ============  ============

  2002        Allowance for
                  doubtful
                  accounts (a)        $ 286,567          $    --           $    --       $(286,567 )          $   --        $   --
                                  ==============  ===============  ================    ============      ============  ============

  2003        Allowance for
                  doubtful
                  accounts (a)          $    --         $     --        $   79,990 (b)      $   --          $ 36,474      $ 43,516
                                  ==============  ===============  ================    ============      ============  ============

</TABLE>

     (a)  Deducted from receivables.

     (b)  Reduction of rental, earned and other income.

<PAGE>

                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

             SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 2003


<TABLE>
                                                                        Costs Capitalized
                                                                          Subsequent to      Net Cost Basis at Which
                                                   Initial Cost            Acquisition            Carried at Close of Period (b)
                                        ------------------------     ------------------  ------------------------------------
                           Encum-                    Buildings and   Improve-   Carrying            Buildings and
                           brances         Land       Improvements    ments     Costs       Land     Improvements   Total
                                        -----------  -------------   ---------  -------  ----------- ------------  ------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Properties the Partnership
  has Invested in Under
  Under Operating Leases:

    Arby's Restaurants:
      Muncie, Indiana (g)     -           $242,759     $564,223          -        -     $242,759    $564,223     $806,982
      Schertz, Texas          -            348,245      470,577          -        -      348,245     470,577      818,822
      Plainfield, Indiana     -            296,025      557,809          -        -      296,025     557,809      853,834

    Burger King Restaurants:
      Harvey, Illinois (h)    -            489,341      734,010          -               403,341     634,010    1,037,351
      Chicago Ridge, Illinois -i)          771,965            -    699,556        -      613,965     587,556    1,201,521
      Lyons, Illinois         -            887,767            -    597,381        -      887,767     597,381    1,485,148

    Denny's Restaurants:
      Pensacola, Florida      -            305,509      670,990          -        -      305,509     670,990      976,499

    Golden Corral Buffet and
      Grill Restaurants:
          Orange Park, Florida-            711,838    1,162,406          -        -      711,838   1,162,406    1,874,244
          Aiken, South Carolin- (f)        508,790            -    862,571        -      508,790     862,571    1,371,361
          Weatherford, Texas (-)           345,926            -    691,222        -      345,926     691,222    1,037,148

    Jack in the Box Restaurants:
      Dinuba, California      -            324,970            -    509,982        -      324,970     509,982      834,952
      LaPorte, Texas          -            355,929            -    560,485        -      355,929     560,485      916,414

    Taco Cabana Restaurants:
      Austin, Texas           -            523,989      692,611          -        -      523,989     692,611    1,216,600
      Houston, Texas (j)      -            700,105      664,089          -        -      700,105     664,089    1,364,194

    Wendy's Old Fashioned
      Hamburgers Restaurants:
          Livingston, Tennesse-            261,701            -          -        -      261,701          (d)     261,701
                                        -----------  -----------  ---------  -------  ----------- -----------  -----------

                                        $7,074,859   $5,516,715   $3,921,197      -   $6,830,859  $9,225,912   $16,056,771
                                        ===========  ===========  =========  =======  =========== ===========  ===========


Properties the Partnership has
    Invested in Under Direct
    Financing Leases:

      Wendy's Old Fashioned
      Hamburgers Restaurant:
          Livingston, Tennesse-                  -            -   $455,575        -            -          (d)          (d)
                                        ===========  ===========  =========  =======  ===========
</TABLE>

<PAGE>


                                  Life on Which
                                  Depreciation in
              Date                Latest Income
Accumulated  of Con-   Date       Statement is
Depreciation structioAcquired      Computed
-----------  -----------------    -----------


   $36,280    1995    03/96          (g)
   118,158    1996    06/96          (c)
   133,614    1996    10/96          (c)


   186,709    1996    03/96          (c)
   172,860    1996    03/96          (c)
   132,397    1997    11/96          (c)


   165,589    1996    08/96          (c)



   303,156    1996    03/96          (c)
   217,240    1996    04/96          (c)
   168,899    1996    03/96          (c)


   124,927    1996    05/96          (c)
   135,914    1996    07/96          (c)


    48,099    1990    12/01          (c)
    35,053    1990    06/02          (c)


        (e)   1996    06/96          (e)
-----------

$1,978,895
===========


        (e)   1996    06/96          (e)


<PAGE>

                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

        NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 2003


(a)    Transactions in real estate and accumulated  depreciation  are summarized
       below. The balances in 2003, 2002, and 2001 have been adjusted to reflect
       the   reclassification  of  properties   accounted  for  as  discontinued
       operations.
<TABLE>

                                                                                              Accumulated
                                                                              Cost            Depreciation
                                                                         ----------------   -----------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

          Properties the Partnership has Invested in Under
           Operating Leases:

              Balance, December 31, 2000                                    $ 16,596,823        $  1,413,687
              Acquisitions                                                     1,216,598                  --
              Dispositions                                                    (3,189,492 )          (321,421 )
              Provision for write-down of assets                                 (39,575 )                --
              Depreciation expense                                                    --             277,902
                                                                         ----------------   -----------------

              Balance, December 31, 2001                                      14,584,354           1,370,168
              Acquisitions (j)                                                 1,364,194                  --
              Reclassification from direct financing lease (g)                   564,223                  --
              Provision for write-down of assets (h) (i)                        (456,000 )                --
              Depreciation expense                                                    --             300,315
                                                                         ----------------   -----------------

              Balance, December 31, 2002                                      16,056,771           1,670,483
              Depreciation expense                                                    --             308,412
                                                                         ----------------   -----------------

              Balance, December 31, 2003                                    $ 16,056,771        $  1,978,895
                                                                         ================   =================
</TABLE>





<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

               NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
                            DEPRECIATION - CONTINUED

                                December 31, 2003


(b)    As of December 31, 2003, the aggregate cost of the  Partnership's  wholly
       owned Properties was $17,341,796 for federal income tax purposes.  All of
       the  leases are  treated  as  operating  leases  for  federal  income tax
       purposes.

(c)    Depreciation  expense is computed for  buildings and  improvements  based
       upon estimated lives of 30 years.

(d)    Certain  components of the lease  relating to land and building have been
       recorded as a direct  financing  lease.  Accordingly,  costs  relating to
       these components of this lease are not shown.

(e)    The portion of the lease  relating to the building has been recorded as a
       direct financing lease. The cost of the building has been included in net
       investment in direct  financing  leases;  therefore,  depreciation is not
       applicable.

(f)    During  the year  ended  December  31,  1998,  the  Partnership  received
       reimbursements   from  the   developer   of  the   property   upon  final
       reconciliation of total construction costs. In connection therewith,  the
       land and building value was adjusted accordingly.

(g)    Effective April 2002, the lease for this property was amended,  resulting
       in the  reclassification  of the  building  portion  of the  lease  to an
       operating lease. The building was recorded at net book value, and will be
       depreciated over its remaining estimated life of approximately 26 years.

(h)    The undepreciated cost of the Property in Harvey,  Illinois,  was written
       down to it  estimated  fair  value due to an  impairment  in  value.  The
       Partnership  recognized  the  impairment  by  recording a  provision  for
       write-down of assets in the amount of $186,000 at December 31, 2002.  The
       provision  represented  the difference  between the  Property's  carrying
       value and the estimated fair value. The cost of the Property presented on
       this  schedule  is the net  amount  at which  the  Property  is  carried,
       including the provision for write-down of assets.

(i)    The undepreciated  cost of the Property in Chicago Ridge,  Illinois,  was
       written down to its  estimated  fair value due to an impairment in value.
       The  Partnership  recognized  the impairment by recording a provision for
       write-down of assets in the amount of $270,000 at December 31, 2002.  The
       provision  represented  the difference  between the  Property's  carrying
       value and the estimated fair value. The cost of the Property presented on
       this  schedule  is the net  amount  at which  the  Property  is  carried,
       including the provision for write-down of assets.

(j)    During 2002, the  Partnership  purchased a real estate  property from CNL
       2001-A,  LP, an affiliate of the General Partners,  for an aggregate cost
       of approximately $ 1,364,200.




<PAGE>



                                  EXHIBIT INDEX


Exhibit Number

                 (a)     Exhibits

              **3.1      Affidavit and Certificate of Limited Partnership of CNL
                         Income  Fund XVII,  Ltd.  (Filed as Exhibit  3.1 to the
                         Registrant's  Registration  Statement on Form S-11, No.
                         33-90998, incorporated herein by reference.)

              **3.2      Amended and Restated  Agreement of Limited  Partnership
                         of CNL Income Fund XVII, Ltd.  (Included as Exhibit 4.2
                         to Form 10-K filed  with the  Securities  and  Exchange
                         Commission on March 21, 1996, and  incorporated  herein
                         by reference.)

              **4.1      Affidavit and Certificate of Limited Partnership of CNL
                         Income  Fund  XVII,  Ltd.  (Filed  as  Exhibit  3.1  to
                         Registration  Statement  No.  33-90998 on Form S-11 and
                         incorporated herein by reference.)

              **4.2      Amended and Restated  Agreement of Limited  Partnership
                         of CNL Income Fund XVII, Ltd.  (Included as Exhibit 4.2
                         to Form 10-K filed  with the  Securities  and  Exchange
                         Commission on March 21, 1996, and  incorporated  herein
                         by reference.)

              **4.3      Form of  Agreement  between CNL Income Fund XVII,  Ltd.
                         and MMS Escrow and  Transfer  Agency,  Inc. and between
                         CNL Income Fund XVIII, Ltd. and MMS Escrow and Transfer
                         Agency, Inc. relating to the Distribution  Reinvestment
                         Plans  (Filed  as  Exhibit  4.4  to  the   Registrant's
                         Registration  Statement  on Form  S-11,  No.  33-90998,
                         incorporated herein by reference.)

              **8.3      Opinion of Baker & Hostetler regarding certain material
                         issues relating to the Distribution  Reinvestment  Plan
                         of CNL Income Fund XVII,  Ltd. (Filed as Exhibit 8.3 to
                         Amendment  No. Three to the  Registrant's  Registration
                         Statement  on Form  S-11,  No.  33-90998,  incorporated
                         herein by reference.)

              **10.1     Management Agreement between CNL Income Fund XVII, Ltd.
                         and CNL Fund Advisors,  Inc.  (Included as Exhibit 10.1
                         to Form 10-K filed  with the  Securities  and  Exchange
                         Commission on March 21, 1996, and  incorporated  herein
                         by reference.)

              **10.2     Assignment  of  Management   Agreement  from  CNL  Fund
                         Advisors,  Inc. to CNL APF Partners,  LP.  (Included as
                         Exhibit 10.2 to Form 10-Q filed with the Securities and
                         Exchange   Commission   on   August   13,   2001,   and
                         incorporated herein by reference.)

              **10.3     Form of Joint Venture Agreement for Joint Ventures with
                         Unaffiliated  Entities  (Filed as  Exhibit  10.2 to the
                         Registrant's  Registration  Statement on Form S-11, No.
                         33-90998, incorporated herein by reference.)

              **10.4     Form of Joint Venture Agreement for Joint Ventures with
                         Affiliated  Programs  (Filed  as  Exhibit  10.3  to the
                         Registrant's  Registration  Statement on Form S-11, No.
                         33-90998, incorporated herein by reference.)

              **10.5     Form of Development Agreement (Filed as Exhibit 10.5 to
                         the Registrant's  Registration  Statement on Form S-11,
                         No. 33-90998, incorporated herein by reference.)

              **10.6     Form of  Indemnification  and Put  Agreement  (Filed as
                         Exhibit 10.6 to the Registrant's Registration Statement
                         on Form  S-11,  No.  33-90998,  incorporated  herein by
                         reference.)

              **10.7     Form  of   Unconditional   Guarantee   of  Payment  and
                         Performance  (Filed as Exhibit 10.7 to the Registrant's
                         Registration  Statement  on Form  S-11,  No.  33-90998,
                         incorporated herein by reference.)

              **10.8     Form of Lease Agreement for Existing  Restaurant (Filed
                         as  Exhibit  10.8  to  the  Registrant's   Registration
                         Statement  on Form  S-11,  No.  33-90998,  incorporated
                         herein by reference.)

              **10.9     Form  of  Lease   Agreement   for   Restaurant   to  be
                         Constructed  (Filed as Exhibit 10.9 to the Registrant's
                         Registration  Statement  on Form  S-11,  No.  33-90998,
                         incorporated herein by reference.)

              **10.10    Form of  Premises  Lease for Golden  Corral  Restaurant
                         (Filed   as   Exhibit   10.10   to   the   Registrant's
                         Registration  Statement  on Form  S-11,  No.  33-90998,
                         incorporated herein by reference.)

              **10.11    Form of  Agreement  between CNL Income Fund XVII,  Ltd.
                         and MMS Escrow and  Transfer  Agency,  Inc. and between
                         CNL Income Fund XVIII, Ltd. and MMS Escrow and Transfer
                         Agency, Inc. relating to the Distribution  Reinvestment
                         Plans  (Filed  as  Exhibit  4.4  to  the   Registrant's
                         Registration  Statement  on Form  S-11,  No.  33-90998,
                         incorporated herein by reference.)

              **10.12    Form of Cotenancy  Agreement with  Unaffiliated  Entity
                         (Filed as  Exhibit  10.12 to  Amendment  No. One to the
                         Registrant's  Registration  Statement on Form S-11, No.
                         33-90998, incorporated herein by reference.)

              **10.13    Form of  Cotenancy  Agreement  with  Affiliated  Entity
                         (Filed as  Exhibit  10.13 to  Amendment  No. One to the
                         Registrant's  Registration  Statement on Form S-11, No.
                         33-90998, incorporated herein by reference.)

              **10.14    Form of Registered Investor Advisor Agreement (Filed as
                         Exhibit 10.14 to Amendment No. One to the  Registrant's
                         Registration  Statement  on Form  S-11,  No.  33-90998,
                         incorporated herein by reference.)

              **10.15    Assignment  of  Management   Agreement   from  CNL  APF
                         Partners,  LP to CNL Restaurants  XVIII, Inc. (Included
                         as Exhibit 10.15 to Form 10-Q filed with the Securities
                         and  Exchange   Commission  on  August  14,  2002,  and
                         incorporated herein be reference.)

              31.1       Certification  of Chief Executive  Officer of Corporate
                         General  Partner  Pursuant  to Rule  13a-14 as  Adopted
                         Pursuant  to Section 302 of the  Sarbanes-Oxley  Act of
                         2002. (Filed herewith.)

              31.2       Certification  of Chief Financial  Officer of Corporate
                         General  Partner  Pursuant  to Rule  13a-14 as  Adopted
                         Pursuant  to Section 302 of the  Sarbanes-Oxley  Act of
                         2002. (Filed herewith.)

              32.1       Certification  of Chief Executive  Officer of Corporate
                         General Partner  Pursuant to 18 U.S.C.  Section 1350 as
                         Adopted  Pursuant to Section 906 of the  Sarbanes-Oxley
                         Act of 2002. (Filed herewith.)

              32.2       Certification  of Chief Financial  Officer of Corporate
                         General Partner  Pursuant to 18 U.S.C.  Section 1350 as
                         Adopted  Pursuant to Section 906 of the  Sarbanes-Oxley
                         Act of 2002. (Filed herewith.)

**previously filed


<PAGE>



                                  EXHIBIT 31.1



<PAGE>


                                  EXHIBIT 31.2



<PAGE>



                                  EXHIBIT 32.1



<PAGE>


                                  EXHIBIT 32.2