[PG NUMBER]

                                  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, 1998

                                       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)

                              400 East South Street
                             Orlando, Florida 32801
          (Address of principal executive offices, including zip code)

       Registrant's telephone number, including area code: (407) 650-1000

               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. [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
28 Properties,  including  interests in three Properties owned by joint ventures
in which the  Partnership  is a  co-venturer  and three  Properties  owned  with
affiliates as  tenants-in-common,  to pay acquisition fees totalling  $1,350,000
and to establish a working  capital  reserve for  Partnership  purposes.  During
1998, the Partnership  received  approximately  $306,100 in a reimbursement from
the developer of the Properties in Aiken, South Carolina and Weatherford, Texas,
upon final  reconciliation  of total  construction  costs.  In January 1999, the
Partnership invested these amounts, along with other net offering proceeds, in a
Property in Zephyrhills,  Florida, with an affiliate as  tenants-in-common,  and
entered into a joint venture  arrangement,  Ocean Shores Joint Venture,  with an
affiliate  of the General  Partners to purchase  and hold one  Property in Ocean
Shores, Washington,  indirectly through a joint venture in which the Partnership
is a co-venturer.  The Partnership  leases the Properties on a triple-net  basis
with the lessees  responsible for all repairs and  maintenance,  property taxes,
insurance and utilities.

         On March 11, 1999, the  Partnership  entered into an Agreement and Plan
of Merger with CNL American Properties Fund, Inc. ("APF"), pursuant to which the
Partnership  would be merged with and into a subsidiary  of APF (the  "Merger").
APF is a real estate investment trust whose primary business is the ownership of
restaurant properties leased on a long-term,  "triple-net" basis to operators of
national and regional  restaurant  chains. APF has agreed to issue shares of its
common stock, par value $0.01 per share (the "APF Shares"), as consideration for
the Merger.  At a special meeting of the partners that is expected to be held in
the third  quarter  of 1999,  Limited  Partners  holding in excess of 50% of the
Partnership's  outstanding limited partnership interests must approve the Merger
prior to consummation of the transaction. If the Limited Partners at the special
meeting approve the Merger,  APF will own the Properties and other assets of the
Partnership. See Item 8.
Financial Statements and Supplementary Data -- Note 11. Subsequent Events.

         In the event that the Limited  Partners  vote  against the Merger,  the
Partnership will hold 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 will consider factors such as potential  capital  appreciation,
net cash flow and federal income tax  considerations.  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.

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 13 to 20 years (the average being 18 years) and expire between 2011
and 2017. 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 $57,300 to
$248,700. 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  five
five-year  renewal  options  subject  to the same  terms and  conditions  as the
initial  lease.  Certain  lessees  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.  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 also  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.

         During 1998,  the  Partnership  exchanged a Boston  Market  Property in
Troy, Ohio, for a Boston Market Property in Inglewood,  California. The terms of
the Troy Property lease facilitated such an exchange between the Partnership and
the  lessee.  In  conjunction  therewith,  the  lease was  amended  to allow the
Inglewood Property to continue under the terms of the Troy lease; therefore, all
terms of the lease remained unchanged.

         In January  1999,  the  Partnership  invested in an Arby's  Property in
Zephyrills,  Florida,  as  tenants-in-common  with an  affiliate  of the General
Partners and entered into a joint venture,  Ocean Shores Joint Venture,  with an
affiliate of the General Partners to purchase and hold one Property  indirectly.
The  lease  terms  for  these  Properties  are  substantially  the  same  as the
Partnership's  other leases as described above in the first three  paragraphs of
this section.

Major Tenants

         During 1998, five lessees of the Partnership and its consolidated joint
venture,  Golden Corral  Corporation,  National  Restaurant  Enterprises,  Inc.,
DenAmerica  Corp.,  Foodmaker,  Inc.  and San Diego  Food  Holdings,  Inc.  each
contributed  more than ten  percent of the  Partnership's  total  rental  income
(including rental income from the Partnerships'  consolidated joint venture, the
Partnership's share of rental income from two Properties owned by unconsolidated
joint ventures and three Properties owned with affiliates as tenants-in-common).
As of  December  31,  1998,  each of  Golden  Corral  Corporation  and  National
Restaurant  Enterprises,  Inc.  was the lessee  under  leases  relating to three
restaurants,  each of DenAmerica Corp. and Foodmaker,  Inc. was the lessee under
leases relating to four  restaurants  and San Diego Food Holdings,  Inc. was the
lessee under a lease relating to one restaurant. It is anticipated that based on
the minimum rental payments required by the leases, these five lessees each will
contribute  more than ten percent of the  Partnership's  total rental  income in
1999. In addition,  four  Restaurant  Chains,  Golden  Corral Family  Steakhouse
Restaurants,  ("Golden Corral"), Jack in the Box, Boston Market and Burger King,
each  accounted  for more than ten  percent of the  Partnership's  total  rental
income during 1998 (including rental income from the Partnership's  consolidated
joint  venture,  the  Partnership's  share of rental income from two  Properties
owned  by  unconsolidated   joint  ventures  and  three  Properties  owned  with
affiliates as tenants-in-common). In 1999, it is anticipated that Golden Corral,
Jack in the Box and Burger  King each will  contribute  more than ten percent of
the  Partnership's  rental income to which the Partnership is entitled under the
terms of the leases.  Any failure of these  lessees or  Restaurant  Chains could
materially  adversely affect the Partnership's  income if the Partnership is not
able to re-lease the Properties in a timely manner.  During 1998, the tenants of
three Boston Market  Properties,  Boston Chicken,  Inc., BCBM Southwest L.P. and
Boston West L.L.C. filed for bankruptcy.  While the tenants have not rejected or
affirmed  these three leases,  there can be no assurance that some or all of the
leases will not be rejected in the future.  The lost revenues resulting from the
rejection  of all three  leases  could have an adverse  effect on the results of
operations of the  Partnership  if the  Partnership  is unable to re-lease these
Properties  in a timely  manner.  As of December 31, 1998,  no single  lessee or
group of affiliated  lessees leased Properties with an aggregate carrying value,
excluding  acquisition fees and certain  acquisition  expenses,  in excess of 20
percent of the total assets of the Partnership.



<PAGE>


Joint Venture Arrangements

         The Partnership has entered into a joint venture arrangement, CNL/GC El
Cajon  Joint  Venture,  with an  unaffiliated  entity to  purchase  and hold one
Property  and has entered into two joint  venture  arrangements,  CNL  Mansfield
Joint Venture and CNL Kingston  Joint  Venture,  with  affiliates of the General
Partners,  for each joint venture to purchase and hold one Property.  Each joint
venture arrangement  provides for the Partnership and its joint venture partners
to share  in all  costs  and  benefits  associated  with the  joint  venture  in
proportion  to each  partner's  percentage  interest in the joint  venture.  The
Partnership and its joint venture partners are also jointly and severally liable
for all debts, obligations and other liabilities of the joint venture.

         Each  joint  venture  has an initial  term of 20 years  and,  after the
expiration of the initial term,  continues in existence from year to year unless
terminated  at the  option of either  of the joint  venturers  or by an event of
dissolution.  Events  of  dissolution  include  the  bankruptcy,  insolvency  or
termination of either of the joint venturer partners, 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.

         The Partnership has management control of CNL/GC El Cajon Joint Venture
and shares  management  control equally with affiliates of the General  Partners
for CNL  Mansfield  Joint  Venture and CNL  Kingston  Joint  Venture.  The joint
venture agreements  restrict any venturer's ability to sell,  transfer or assign
its joint  venture  interest  without  first  offering  it for sale to its joint
venture partner, either upon such terms and conditions as to which the venturers
may agree or, in the event the  venturers  cannot  agree,  on the same terms and
conditions  as any offer  from a third  party to  purchase  such  joint  venture
interest.

         Net cash flow from  operations  of CNL/GC El Cajon Joint  Venture,  CNL
Mansfield  Joint  Venture  and CNL  Kingston  Joint  Venture is  distributed  80
percent, 21 percent and 60.06%, respectively, to the Partnership and the balance
is  distributed  to each other  joint  venture  partner in  accordance  with its
percentage ownership in the respective 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.

         In addition to the above joint venture  arrangements,  the  Partnership
has entered into separate  agreements to hold a Property in Fayetteville,  North
Carolina,  a Property in Corpus  Christi,  Texas and a Property in Akron,  Ohio,
respectively,  as tenants-in-common with affiliates of the General Partners. The
agreements  provide  for the  Partnership  and the  affiliates  to  share in the
profits and losses of the  Properties  and net cash flow from the  Properties in
proportion  to each  co-owner's  percentage  interest.  The  Partnership  owns a
19.56%,  27.42% and 36.91%  interest in the  Properties in  Fayetteville,  North
Carolina, Corpus Christi, Texas and Akron, Ohio, respectively.

         In addition, in January 1999, the Partnership entered into an agreement
to hold an Arby's Property in Zephyrhills,  Florida, as tenants-in-common,  with
affiliates of the General Partners.  The agreement  provides for the Partnership
and the  affiliates  to share in the profits and losses of the  Property and net
cash flow from the  Property,  in proportion  to each  co-venturer's  percentage
interest.  The Partnership owns a 24 percent interest in this Property.  Also in
January 1999, the Partnership  entered into a joint venture  arrangement,  Ocean
Shores Joint Venture,  with an affiliate of the General Partners to purchase and
hold one Property.  The joint venture  arrangement  provides for the Partnership
and its joint  venture  partners to share in all costs and  benefits  associated
with the joint venture in proportion to each  partner's  percentage  interest in
the joint venture.  The  Partnership  owns a 30.94%  interest in the profits and
losses of the joint venture.

Management Services

         CNL Fund Advisors, Inc., 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,
CNL  Fund  Advisors,   Inc.  is  responsible  for  collecting  rental  payments,
inspecting  the  Properties  and the tenant's  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.  CNL Fund  Advisors,  Inc.  also  assists  the  General  Partners in
negotiating the leases.  For these  services,  the Partnership has agreed to pay
CNL Fund


<PAGE>


Advisors,  Inc. 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.

Competition

         The fast-food,  family-style and casual dining  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.

Employees

         The  Partnership   has  no  employees.   The  officers  of  CNL  Realty
Corporation  and the officers and employees of CNL Fund Advisors,  Inc.  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 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, 1998,  the  Partnership  owned  either  directly or
through  joint  venture  arrangements,  28  Properties,  located  in 12  states.
Reference  is made to the Schedule of Real Estate and  Accumulated  Depreciation
filed with this  report for a listing of the  Property  and its cost,  including
acquisition fees and certain acquisition expenses.

Description of Properties

         Land. The Partnership's  Property sites range from approximately 15,185
to 91,400  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.

         Buildings.  Each of the Properties owned by the Partnership  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.

         Generally,  a  lessee  is  required,  under  the  terms  of  its  lease
agreement, to make such capital expenditures, as may be reasonably necessary, to
refurbish  buildings,  premises,  signs and equipment,  so as to comply with the
lessee's  obligations,  if applicable,  under the franchise agreement to reflect
the current commercial image of its Restaurant Chain. These capital expenditures
are required to be paid by the lessee during the term of the lease.

         Leases  with Major  Tenants.  The terms of each of the leases  with the
Partnership's  major  tenants as of December  31,  1998 (see Item 1.  Business -
Major  Tenants),  are  substantially  the  same as  those  described  in Item 1.
Business - Leases.

         Golden Corral Corporation leases three Golden Corral  restaurants.  The
initial  term of each  lease is 15 years  (expiring  in  2011)  and the  average
minimum base annual rent is approximately  $146,100 (ranging from  approximately
$107,600 to $190,000).

         National  Restaurant   Enterprises,   Inc.  leases  three  Burger  King
restaurants.  The initial term of each lease is 20 years (expiring  between 2016
and 2017) and the average  minimum  base annual rent is  approximately  $144,400
(ranging from approximately $123,200 to $153,600).

         DenAmerica  Corp.  leases  two  Denny's  restaurants,  one Mr.  Fable's
restaurant and one Black-eyed Pea restaurant.  The initial term of each lease is
20 years  (expiring  between 2015 and 2016) and the average  minimum base annual
rent is approximately $120,300 (ranging from approximately $98,700 to $153,800).

         Foodmaker,  Inc. leases four Jack in the Box  restaurants.  The initial
term of each lease is 18 years (expiring  between 2014 and 2015) and the average
minimum base annual rent is approximately  $93,900  (ranging from  approximately
$80,100 to $117,900).

         San Diego Food Holdings, Inc. leases one Golden Corral restaurant.  The
initial term of the lease is 20
years (expiring 2016) and the minimum base rent is approximately $248,700.

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

Item 3.  Legal Proceedings

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

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

         Not applicable.



                                     PART II


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

         As of March 11, 1999,  there were 2,478 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.  Limited  Partners who wish to sell
their  Units  may  offer  the  Units  for  sale  pursuant  to the  Partnership's
distribution  reinvestment  plan (the "Plan"),  and Limited Partners who wish to
have their  distributions  used to acquire additional Units (to the extent Units
are  available  for  purchase),  may do so  pursuant  to such Plan.  The General
Partners have the right to prohibit  transfers of Units.  From inception through
December 31, 1998, the price paid for any Unit transferred  pursuant to the Plan
was $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 1998 and 1997 other than
pursuant to the Plan, net of commissions.
<TABLE>
<CAPTION>

                                                    1998 (1)                                1997
                                         --------------------------------      --------------------------------
                                          High       Low        Average         High       Low        Average
                                         -------    -------    ----------      -------    -------    ----------
<S> <C>
         First Quarter                    (2)        (2)          (2)           (2)        (2)          (2)
         Second Quarter                   7.73       7.73        7.73           (2)        (2)          (2)
         Third Quarter                    (2)        (2)          (2)           (2)        (2)          (2)
         Fourth Quarter                   (2)        (2)          (2)           (2)        (2)          (2)
</TABLE>

(1)      A total of 400 Units were  transferred  other than pursuant to the Plan
         for the year ended December 31, 1998.

(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 the  years  ended  December  31,  1998 and  1997,  the  Partnership
declared cash distributions of $2,400,000 and $2,287,500,  respectively,  to the
Limited  Partners.  No  amounts  distributed  to  partners  for the years  ended
December  31,  1998 and 1997,  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.  As  indicated  in the chart  below,
these   distributions   were  declared  following  the  close  of  each  of  the
Partnership's  calendar  quarters.  These amounts include monthly  distributions
made in arrears for the Limited Partners electing to receive such  distributions
on this basis.

                Quarter Ended                 1998              1997
                --------------------       ------------      ------------
                March 31                      $600,000          $525,000
                June 30                        600,000           562,500
                September 30                   600,000           600,000
                December 31                    600,000           600,000

         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.


Item 6.  Selected Financial Data
<TABLE>
<CAPTION>

                                                                                                  February 10,
                                                                                                   1995 (date
                                                                                                 of inception)
                                          Year Ended         Year Ended         Year Ended          through
                                         December 31,       December 31,       December 31,       December 31,
                                             1998               1997               1996             1995 (1)
                                        ----------------   ----------------  -----------------  -----------------
<S> <C>
 Revenues (2)                              $  2,946,048       $  2,772,714       $  1,444,503        $    12,153
 Net income                                   2,394,158          2,203,557          1,095,759              8,351
 Cash distributions declared                  2,400,000          2,287,500          1,166,689             28,275
 Net income per Unit (3)                           0.80               0.73               0.52               0.02
 Cash distributions declared per                   0.80               0.76               0.55               0.08
     Unit (3)

                                             1998               1997               1996               1995
                                        ----------------   ----------------  -----------------  -----------------
 At December 31:
     Total assets                         $  27,365,705      $  27,524,148      $  28,675,007       $  4,878,421
     Partners' capital                       26,230,361         26,236,203         26,320,146          4,642,233
</TABLE>

(1)      Operations  did not commence until November 4, 1995, the date following
         when  the  Partnership   received  the  minimum  offering  proceeds  of
         $1,500,000, and such proceeds were released from escrow.

(2)      Revenues  include equity in earnings of  unconsolidated  joint ventures
         and minority interest in income of the consolidated joint venture.

(3)      Based  on  the  weighted   average  number  of  Limited  Partner  Units
         outstanding  during the years ended December 31, 1998,  1997,  1996 and
         the period February 10, 1995 (date of inception)  through  December 31,
         1995.

         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 selected national and regional  fast-food,  family-style and casual
dining Restaurant Chains. The leases are generally  triple-net leases,  with the
lessees generally  responsible for all repairs and maintenance,  property taxes,
insurance  and  utilities.  As of December 31, 1998,  the  Partnership  owned 28
Properties, either directly or through joint venture arrangements.

Liquidity and Capital Resources

         The Partnership  commenced an offering to the public of up to 3,000,000
Units of limited  partnership  interest.  The  Partnership's  offering  of Units
terminated  on  September  19,  1996,  at which  time the  maximum  proceeds  of
$30,000,000 (3,000,000 Units) had been received from investors. The Partnership,
therefore, will derive no additional capital resources from the offering.

         Net  proceeds to the  Partnership  from its  offering  of Units,  after
deduction of organizational and offering expenses, totalled $26,400,000.  During
1996, the Partnership acquired 23 additional Properties,  including one Property
owned by a joint  venture  in which the  Partnership  is a  co-venturer  and one
Property,  owned  with  an  affiliate,  as  tenants-in-common,   at  a  cost  of
approximately   $23,406,500,   including   acquisition  fees  and  miscellaneous
acquisition  expenses.  During 1997,  the  Partnership  used the majority of its
remaining  net  offering  proceeds  to acquire  two  additional  Properties,  as
tenants-in-common,  with affiliates of the General Partners. In addition, during
1997,  the  Partnership  entered into two joint  ventures,  CNL Mansfield  Joint
Venture and CNL Kingston Joint Venture, with affiliates of the General Partners,
to  own  an  approximate  21  percent  interest  and  60.06  percent   interest,
respectively,  in two  Properties.  During  1998,  the  Partnership  contributed
$124,500 to Kingston Joint Venture to pay for additional  construction costs. As
a result of the above transactions, as of December 31, 1998, the Partnership had
acquired 28 Properties,  including three  Properties  owned by joint ventures in
which  the  Partnership  is  a  co-venturer  and  three  Properties  owned  with
affiliates  as  tenants-in-common,   and  had  paid  acquisition  fees  totaling
$1,350,000 to an affiliate of the General Partners. During 1998, the Partnership
received  approximately $306,100 in reimbursements from the developer upon final
reconciliation of total  construction costs relating to the Properties in Aiken,
South  Carolina  and   Weatherford,   Texas,  in  accordance  with  the  related
development  agreements.  During  January 1999, the  Partnership  invested these
amounts,  along with other net offering proceeds,  in a Property in Zephyrhills,
Florida,  with an  affiliate  as  tenants-in-common,  and  entered  into a joint
venture arrangement,  Ocean Shores Joint Venture, with affiliates of the General
Partners  to own a 30.94%  interest  in the  profits  and  losses  of the  joint
venture. The remaining net offering proceeds from the Partnership's  offering of
Units were reserved for Partnership purposes.

         Until  Properties  were acquired by the  Partnership,  all  Partnership
proceeds were held in short-term,  highly liquid  investments  which the General
Partners  believed to have  appropriate  safety of  principal.  This  investment
strategy provided high liquidity in order to facilitate the Partnership's use of
these  funds to  acquire  Properties  at such time as  Properties  suitable  for
acquisition were located.

         Currently,  the  Partnership's  primary  source of capital is cash from
operations  (which includes cash received from tenants,  distributions  from the
joint ventures and interest  received,  less cash paid for expenses).  Cash from
operations  was  $2,520,919,  $2,495,114,  and  $1,232,948  for the years  ended
December  31,  1998,  1997,  and 1996,  respectively.  The increase in cash from
operations  during  1998 and 1997,  each as compared to the  previous  year,  is
primarily a result of changes in the  Partnership's  working capital and changes
in income and expenses as described in "Results of Operations" below.

         None  of  the  Properties  owned  by  the  Partnership  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,


<PAGE>


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.

         Currently,  rental income from the  Partnership's  Properties  and cash
reserves  are  invested in money  market  accounts or other  short-term,  highly
liquid  investments   pending  the  Partnership's  use  of  such  funds  to  pay
Partnership expenses or to make distributions to partners. At December 31, 1998,
the  Partnership  had  $1,492,343  invested in such  short-term  investments  as
compared to $1,238,799 at December 31, 1997. The increase in the amount invested
in  short-term  investments  during  1998,  as  compared to 1997,  is  primarily
attributable to the Partnership  receiving  construction  reimbursements  during
1998,  as described  above.  The funds  remaining  at December  31, 1998,  after
payment  of  distribution  and  other  liabilities,  will be  used  to meet  the
Partnership's working capital and other needs.

         During the year ended  December  31,  1996,  affiliates  of the General
Partners   incurred  on  behalf  of  the   Partnership   $231,885   for  certain
organizational  and  offering  expenses.  In  addition,  during the years  ended
December  31,  1997,  and  1996,  the  affiliates  incurred  on  behalf  of  the
Partnership $11,262, and $69,835, respectively, for certain acquisition expenses
and during the years ended  December 31,  1998,  1997 and 1996,  the  affiliates
incurred  on  behalf  of  the  Partnership   $64,521,   $59,451,   and  $64,906,
respectively,  for certain operating expenses. As of December 31, 1998 and 1997,
the Partnership  owed $14,448 and $2,875,  respectively,  to related parties for
such amounts,  accounting and administrative services and management fees. As of
March 11, 1999, the  Partnership had reimbursed the affiliates all such amounts.
Other liabilities,  including  distributions  payable,  decreased to $688,094 at
December 31, 1998, from $865,877 at December 31, 1997,  partially as a result of
a decrease  in deferred  rental  income and at December  31,  1998.  The General
Partners  believe that the  Partnership  has sufficient cash on hand to meet its
current working capital needs.

         Based on cash from operations,  the Partnership declared  distributions
to the Limited Partners of $2,400,000,  $2,287,500, and $1,166,689 for the years
ended  December  31,  1998,  1997,  and  1996,  respectively.   This  represents
distributions  of $0.80,  $0.76, and $0.55 per Unit for the years ended December
31,  1998,  1997,  and  1996,  respectively.  No  amounts  distributed  or to be
distributed to the Limited Partners for the years ended December 31, 1998, 1997,
and 1996, 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.

         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 event a tenant's  insurance policy
lapses or is insufficient to cover a claim relating to the Properties.

         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 generate cash flow in excess
of operating expenses.

         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 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 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.

         On March 11, 1999, the  Partnership  entered into an Agreement and Plan
of Merger with APF,  pursuant to which the Partnership  would be merged with and
into a subsidiary  of APF. As  consideration  for the Merger,  APF has agreed to
issue  3,014,377  APF Shares  which,  for the  purposes  of  valuing  the merger
consideration,  have been valued by APF at $10.00 per APF Share,  the price paid
by APF  investors in APF's most recent public  offering.  In order to assist the
General  Partners in evaluating the proposed merger  consideration,  the General
Partners  retained  Valuation  Associates,  a nationally  recognized real estate
appraisal firm, to appraise the  Partnership's  restaurant  property  portfolio.
Based on Valuation Associates'  appraisal,  the Partnership's property portfolio
and other assets were valued on a going concern basis  (meaning the  Partnership
continues  unchanged) at  $29,681,344  as of December 31, 1998.  Legg Mason Wood
Walker,  Incorporated  has  rendered  a  fairness  opinion  that  the APF  Share
consideration, payable by APF, is fair to the Partnership from a financial point
of view.  The APF Shares are  expected  to be listed for trading on the New York
Stock Exchange concurrently with the consummation of the Merger, and, therefore,
would be freely  tradable  at the option of the former  Limited  Partners.  At a
special meeting of the partners that is expected to be held in the third quarter
of  1999,  Limited  Partners  holding  in  excess  of 50%  of the  Partnership's
outstanding  limited  partnership  interests  must  approve the Merger  prior to
consummation of the  transaction.  The General Partners intend to recommend that
the Limited Partners of the Partnership  approve the Merger.  In connection with
their  recommendation,  the  General  Partners  will  solicit the consent of the
Limited Partners at the special meeting.

Results of Operations

         The  Partnership  owned and leased 22 wholly  owned  Properties  during
1998, 1997 and 1996. In addition,  during 1996, the Partnership owned and leased
one Property  through a joint venture  arrangement in which the Partnership is a
co-venturer,  and owned and leased one Property with an affiliate of the General
Partners,  as  tenants-in-common.  During 1997 and 1998, the  Partnership  was a
co-venturer  in three joint ventures that each owned and leased one Property and
also owned and leased three Properties with affiliates of the General  Partners,
as  tenants-in-common.  As of December 31, 1998, the Partnership  owned,  either
directly or through joint venture  arrangements,  28 Properties  (including  one
Property in Troy,  Ohio  exchanged for one Property in  Inglewood,  California),
which are subject to long-term,  triple-net leases. The leases of the Properties
provide  for  minimum   base  annual   rental   payments   (payable  in  monthly
installments) ranging from approximately $63,000 to $248,700.  All 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.  For further  description of the Partnership's
leases and  Properties,  see Item 1.  Business - Leases and Item 2.  Properties,
respectively.

         During  the  years  ended  December  31,  1998,  1997,  and  1996,  the
Partnership and its consolidated  joint venture,  CNL/GC El Cajon Joint Venture,
earned $2,813,442,  $2,642,743, and $1,185,279,  respectively,  in rental income
from  operating  leases and earned  income from  direct  financing  leases.  The
increase in rental and earned  income  during  1998,  as  compared  to 1997,  is
primarily attributable to the fact that two Properties were operational for only
a partial  year during  1997,  as compared  to a full year during  1998,  due to
acquisitions  by the  Partnership  during  1997.  The increase  during 1997,  as
compared to 1996, is partially attributable to the fact that Properties acquired
during  1996 were  operational  for a full year  during  1997,  as compared to a
partial  year during 1996.  The  increase is  partially  offset by a decrease in
rental income due from the tenants of the  Properties in Aiken,  South  Carolina
and Weatherford,  Texas, as a result of receiving reimbursements of construction
costs  from  the  developer,  as  described  above  in  "Liquidity  and  Capital
Resources", which reduced the depreciable base of the Property. In addition, for
the years ended  December 31,  1998,  1997,  and 1996,  the  Partnership  earned
$140,595, $100,918, and $4,834, respectively,  attributable to net income earned
by unconsolidated joint ventures in which the Partnership is a co-venturer.  The
increase in net income earned by  unconsolidated  joint ventures during 1998 and
1997,  each as compared to the previous year, is primarily  attributable  to the
Partnership  investing in two Properties with affiliates of the General Partners
as  tenants-in-common  and in two joint  ventures in which the  Partnership is a
co-venturer,   during  1997,  as  described  above  in  "Liquidity  and  Capital
Resources,"  and the fact the  Properties  were  operational  for the full  year
during 1998, as compared to a partial year during 1997.

         During  the  year  ended  December  31,  1998,   five  lessees  of  the
Partnership  and its  consolidated  joint  venture,  Golden Corral  Corporation,
National Restaurant Enterprises,  Inc., DenAmerica Corp.,  Foodmaker,  Corp. and
San Diego Food Holdings,  Inc.,  each  contributed  more than ten percent of the
Partnership's  total rental income  (including rental and earned income from the
Partnership's  consolidated joint venture and the Partnership's  share of rental
income  from two  Properties  owned by  unconsolidated  joint  venture and three
Properties owned with separate affiliates as tenants-in-common).  As of December
31, 1998, Golden Corral Corporation and National Restaurant  Enterprises,  Inc.,
were each lessee under leases relating to three  restaurants,  DenAmerica  Corp.
and  Foodmaker,  Inc.,  were  each the  lessee  under  leases  relating  to four
restaurants  and San Diego Food  Holdings,  Inc.  was the  lessee  under a lease
relating to one restaurant.  It is anticipated  that based on the minimum rental
payments required by the leases, Golden Corral Corporation,  National Restaurant
Enterprises,  Inc.,  DenAmerica  Corp.,  Foodmaker,  Inc.,  and San  Diego  Food
Holdings,  Inc. each will contribute more than ten percent of the  Partnership's
total rental income in 1999. In addition, four Restaurant Chains, Golden Corral,
Burger King,  Jack in the Box and Boston Market each accounted for more than ten
percent of the Partnership's  total rental income during the year ended December
31,  1998,   (including   rental  and  earned  income  from  the   Partnership's
consolidated  joint venture,  the Partnership's  share of rental income from two
Properties  owned by  unconsolidated  joint ventures and three  Properties owned
with separate affiliates of the General Partners as tenants-in-common). In 1999,
it is  anticipated  that Golden Corral,  Jack in the Box, and Burger King,  each
will  contribute  more than ten percent of the  Partnership's  rental  income to
which the Partnership is entitled under the terms of the leases.  Any failure of
these  lessees  or  Restaurant  Chains  could  materially  adversely  affect the
Partnership's  income if the  Partnership is not able to re-lease the Properties
in a timely manner.  During 1998, the tenants of three Boston Market  Properties
filed for bankruptcy.  While the tenant has not rejected or affirmed these three
leases,  there can be no  assurance  that some or all of the leases  will not be
rejected in the future.  The lost revenues  resulting  from the rejection of all
three leases could have an adverse  effect of the results of  operations  of the
Partnership  if the  Partnership  is unable to re-lease  these  Properties  in a
timely manner.

         During  the  years  ended  December  31,  1998,  1997,  and  1996,  the
Partnership also earned $51,240, $69,779 and $244,406, respectively, in interest
income from  investments in money market  accounts or other  short-term,  highly
liquid  investments.  The decrease in interest income during 1998 and 1997, each
as compared to the previous year, is primarily  attributable  to the decrease in
the  amount of funds  invested  in  short-term,  liquid  investments  due to the
payment  during 1997, of  construction  costs accrued at December 31, 1996,  the
acquisition of Properties as tenants-in-common with affiliates,  and as a result
of acquiring  interests in joint  ventures as described  above in "Liquidity and
Capital Resources."

         Operating expenses,  including  depreciation and amortization  expense,
were  $551,890,  $569,157,  and $348,744 for the years ended  December 31, 1998,
1997, and 1996, respectively.  The decrease in operating expenses during 1998 as
compared  to 1997 is  partially  attributable  to a decrease  in  administrative
expenses,  which includes  services  related to accounting;  financial,  tax and
regulatory compliance and reporting; lease and loan compliance;  limited partner
distributions  and  reporting;  and  investor  relations.  The  decrease is also
attributable  to  a  decrease  in  depreciation  expense  as  a  result  of  the
reimbursement   from  the  developer  of  construction  costs  relating  to  the
Properties in Aiken, South Carolina and Weatherford, Texas as described above in
"Liquidity and Capital  Resources",  which reduced the  depreciable  base of the
Property. The decrease in operating expenses during 1998 as compared to 1997, is
partially  off set by, and the  increase  during 1997 as  compared  to 1996,  is
partially attributable to the Partnership incurring taxes relating to the filing
of various state tax returns during 1998 and 1997. The increase  during 1997, as
compared to 1996,  is  primarily  attributable  to the fact that the  Properties
acquired during 1996 were  operational for a full year in 1997, as compared to a
partial year during 1996.

         The decrease  during 1998 as compared to 1997,  is partially  offset by
the fact that the Partnership  incurred $14,139 in transaction  costs related to
the General  Partners  retaining  financial and legal advisors to assist them in
evaluating and  negotiating  the proposed Merger with APF, as described above in
"Liquidity and Capital  Resources." If the Limited  Partners  reject the Merger,
the Partnership  will bear the portion of the  transaction  costs based upon the
percentage of "For" votes and the General Partners will bear the portion of such
transaction costs based upon the percentage of "Against" votes and abstentions.

         In April 1998, the American  Institute of Certified Public  Accountants
issued   Statement  of  Position  98-5  "Reporting  on  the  Costs  of  Start-Up
Activities." The Statement,  which is effective for fiscal years beginning after
December  15,  1998,  requires  that an entity  expense  the  costs of  start-up
activities and  organization  costs as they are incurred.  The Partnership  will
adopt this Statement in 1999. While historically these costs have been amortized
over five years,  the General  Partners  believe that adoption of this Statement
will not have a  material  effect on the  Partnership's  financial  position  or
results of operations.

         The Partnership's leases as of December 31, 1998, are 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.  Management  expects  that  increases in  restaurant  sales volume due to
inflation  and real sales growth  should  result in an increase in rental income
over  time.  Continued  inflation  also 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.



<PAGE>


Year 2000

         The Year 2000 problem is the result of information  technology  systems
and embedded  systems  (products which are made with  microprocessor  (computer)
chips such as HVAC systems,  physical  security  systems and elevators)  using a
two-digit  format,  as  opposed  to four  digits,  to  indicate  the year.  Such
information  technology and embedded systems may be unable to properly recognize
and process date-sensitive information beginning January 1, 2000.

         The  Partnership  currently  does not have any  information  technology
systems.  Affiliates of the General Partners provide all services  requiring the
use of information  technology  systems pursuant to a management  agreement with
the  Partnership.   The  maintenance  of  embedded  systems,   if  any,  at  the
Partnership's  Properties is the responsibility of the tenants of the Properties
in accordance with the terms of the Partnership's  leases.  The General Partners
and  affiliates  have  established  a team  dedicated to reviewing  the internal
information technology systems used in the operation of the Partnership, and the
information  technology and embedded  systems and the Year 2000 compliance plans
of the Partnership's tenants, significant suppliers,  financial institutions and
transfer agent.

         The  information  technology  infrastructure  of the  affiliates of the
General  Partners  consists of a network of personal  computers and servers that
were  obtained   from  major   suppliers.   The   affiliates   utilize   various
administrative  and financial  software  applications on that  infrastructure to
perform the business functions of the Partnership.  The inability of the General
Partners  and  affiliates  to identify  and timely  correct  material  Year 2000
deficiencies  in  the  software  and/or   infrastructure   could  result  in  an
interruption in, or failure of, certain of the Partnership's business activities
or operations.  Accordingly,  the General Partners and affiliates have requested
and  are  evaluating  documentation  from  the  suppliers  of the  software  and
infrastructure  of the  affiliates  regarding the Year 2000  compliance of their
products  that  are  used  in  the  business  activities  or  operations  of the
Partnership.   The  General  Partners  and  affiliates  have  not  yet  received
sufficient certifications to be assured that the suppliers have fully considered
and mitigated any potential material impact of the Year 2000  deficiencies.  The
costs  expected to be incurred by the General  Partners and affiliates to become
Year 2000  compliant  will be incurred by the General  Partners and  affiliates;
therefore,  these  costs  will  have no impact  on the  Partnership's  financial
position or results of operations.

         The  Partnership  has  material  third  party  relationships  with  its
tenants,  financial  institutions and transfer agent. The Partnership depends on
its  tenants  for  rents  and  cash  flows,   its  financial   institutions  for
availability  of cash and its  transfer  agent to  maintain  and track  investor
information.  If any of these third parties are unable to meet their obligations
to the  Partnership  because of the Year 2000  deficiencies,  such a failure may
have a material impact on the  Partnership.  Accordingly,  the General  Partners
have requested and are evaluating  documentation from the Partnership's tenants,
financial  institutions,   and  transfer  agent  relating  to  their  Year  2000
compliance  plans.  The  General  Partners  have  not  yet  received  sufficient
certifications  to be assured  that the  tenants,  financial  institutions,  and
transfer agent have fully considered and mitigated any potential material impact
of the Year 2000 deficiencies.  Therefore,  the General Partners do not, at this
time,  know of the potential  costs to the  Partnership of any adverse impact or
effect of any Year 2000 deficiencies by these third parties.

         The General  Partners  currently  expect that all year 2000  compliance
testing  and any  necessary  remedial  measures  on the  information  technology
systems used in the business  activities and operations of the Partnership  will
be completed prior to June 30, 1999.  Based on the progress the General Partners
and affiliates  have made in identifying and addressing the  Partnership's  Year
2000 issues and the plan and timeline to complete the  compliance  program,  the
General  Partners  do  not  foresee   significant   risks  associated  with  the
Partnership's  Year 2000 compliance at this time.  Because the General  Partners
and affiliates are still  evaluating  the status of the  information  technology
systems used in business  activities and operations of the  Partnership  and the
systems of the third parties with which the  Partnership  conducts its business,
the General Partners have not yet developed a comprehensive contingency plan and
are unable to identify "the most reasonably  likely worst case scenario" at this
time.  If  the  General  Partners  identify  significant  risks  related  to the
Partnership's  Year 2000 compliance or if the Partnership's Year 2000 compliance
program's  progress deviates  substantially from the anticipated  timeline,  the
General Partners will develop appropriate contingency plans.




<PAGE>


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 Accountants                      

Financial Statements:

  Balance Sheets  

  Statements of Income                                 

  Statements of Partners' Capital                      

  Statements of Cash Flows                            

  Notes to Financial Statements                       


<PAGE>






                        Report of Independent Accountants




To the Partners
CNL Income Fund XVII, Ltd.


In our opinion,  the financial  statements  listed in the index  appearing under
item 14(a)(1) present fairly, in all material  respects,  the financial position
of CNL Income Fund XVII,  Ltd. (a Florida  limited  partnership) at December 31,
1998 and 1997, and the results of their operations and their cash flows for each
of the three years in the period  ended  December  31, 1998 in  conformity  with
generally  accepted  accounting  principles.  In addition,  in our opinion,  the
financial  statement  schedule listed in the index appearing under item 14(a)(2)
presents  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  schedule are the  responsibility of the
Partnership's  management;  our responsibility is to express an opinion on these
financial  statements and the financial  statement schedule based on our audits.
We  conducted  our  audits of these  statements  in  accordance  with  generally
accepted auditing  standards 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 the opinion expressed above.




Orlando, Florida
January 23, 1999,  except for the second paragraph of Note 11 for which the date
is March 11, 1999.



<PAGE>


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

                                 BALANCE SHEETS
<TABLE>
<CAPTION>


                                                                                           December 31,
                                                                                   1998                     1997
                                                                             -----------------         ----------------
<S> <C>
                         ASSETS

Land and buildings on operating leases, less
    accumulated depreciation                                                      $20,648,128              $21,328,869
Net investment in direct financing leases                                           2,980,811                3,056,783
Investment in joint ventures                                                        1,443,064                1,328,067
Cash and cash equivalents                                                           1,492,343                1,238,799
Receivables, less allowance for doubtful
    accounts of $1,283 and $14,333                                                     33,963                      613
Organization costs, less accumulated
    amortization of $6,309 and $4,309                                                   3,691                    5,691
Accrued rental income                                                                 644,643                  357,246
Other assets                                                                          119,062                  104,411
                                                                             -----------------         ----------------

                                                                                  $27,365,705              $27,420,479
                                                                             =================         ================


                     LIABILITIES AND PARTNERS' CAPITAL

Accounts payable                                                                    $   3,598                 $  2,922
Accrued construction costs payable                                                         --                   38,834
Distributions payable                                                                 600,000                  600,000
Due to related parties                                                                 14,448                    2,875
Rents paid in advance                                                                  20,578                   55,762
Deferred rental income                                                                 63,918                   64,690
                                                                             -----------------         ----------------
    Total liabilities                                                                 702,542                  765,083

Minority interest                                                                     432,802                  419,193

Partners' capital                                                                  26,230,361               26,236,203
                                                                             -----------------         ----------------

                                                                                  $27,365,705              $27,420,479
                                                                             =================         ================

</TABLE>
                 See accompanying notes to financial statements.


<PAGE>


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

                              STATEMENTS OF INCOME

<TABLE>
<CAPTION>

                                                                            Year Ended December 31,
                                                                 1998               1997                 1996
                                                            --------------     ---------------      ---------------
<S> <C>
Revenues:
    Rental income from operating leases                        $2,447,938          $2,323,256           $1,054,534
    Earned income from direct financing
       leases                                                     365,504             319,487              130,745
    Interest                                                       51,240              69,779              244,406
    Other income                                                    3,403               1,128                9,984
                                                            --------------     ---------------      ---------------
                                                                2,868,085           2,713,650            1,439,669
                                                            --------------     ---------------      ---------------
Expenses:
    General operating and administrative                          110,537             128,168              144,728
    Professional services                                          19,504              21,877               14,326
    Management fee to related party                                26,690              25,377               10,482
    State and other taxes                                          11,811               6,443                   --
    Depreciation and amortization                                 369,209             387,292              179,208
    Transaction costs                                              14,139                  --                   --
                                                            --------------     ---------------      ---------------
                                                                  551,890             569,157              348,744
                                                            --------------     ---------------      ---------------

Income Before Minority Interest in Income
    of Consolidated Joint Venture and
    Equity in Earnings of Unconsolidated
    Joint Ventures                                              2,316,195           2,144,493            1,090,925

Minority Interest in Income of Consolidated
    Joint Venture                                                 (62,632 )           (41,854 )                 --

Equity in Earnings of Unconsolidated Joint
    Ventures                                                      140,595             100,918                4,834
                                                            --------------     ---------------      ---------------

Net Income                                                     $2,394,158          $2,203,557           $1,095,759
                                                            ==============     ===============      ===============

Allocation of Net Income:
    General partners                                              $   (59 )          $   (839 )           $  (709)
    Limited partners                                            2,394,217           2,204,396            1,096,468
                                                            --------------     ---------------      ---------------

                                                               $2,394,158          $2,203,557          $ 1,095,759
                                                            ==============     ===============      ===============

Net Income Per Limited Partner Unit                              $   0.80            $   0.73             $   0.52
                                                            ==============     ===============      ===============

Weighted Average Number of
    Limited Partner Units Outstanding                           3,000,000           3,000,000            2,121,253
                                                            ==============     ===============      ===============

</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, 1998, 1997, and 1996

<TABLE>
<CAPTION>

                                              General Partners                    Limited Partners
                                        -------------------------- ----------------------------------------------------
                                                      Accumulated                              Accumulated  Syndication
                                        Contributions   Earnings   Contributions Distributions   Earnings      Costs       Total
                                        ------------- ------------ ------------- ------------- ------------ ----------- -----------
<S> <C>
Balance, December 31, 1995              $     1,000    $      (3 ) $  5,696,921   $   (28,275)  $  8,354  $(1,035,764)  $4,642,233

    Contributions from limited partners          --           --     24,303,079            --        --          --     24,303,079
    Distributions to limited partners
       ($0.55 per limited partner unit)          --           --             --    (1,166,689)       --          --     (1,166,689)
    Syndication costs                            --           --             --            --        --    (2,554,236)  (2,554,236)
    Net income                                   --         (709 )           --            --   1,096,468        --      1,095,759
                                        -----------   ------------ -------------  ------------- ----------  ----------  -----------

Balance, December 31, 1996                    1,000         (712 )   30,000,000    (1,194,964)  1,104,822  (3,590,000)  26,320,146

    Distributions to limited partners
       ($0.76 per limited partner unit)          --           --             --    (2,287,500)        --         --     (2,287,500)
    Net income                                   --         (839 )           --            --   2,204,396        --      2,203,557
                                        -----------   ------------ -------------  ------------  ----------  ----------   -----------

Balance, December 31, 1997                    1,000       (1,551 )   30,000,000    (3,482,464)  3,309,218  (3,590,000)  26,236,203

    Distributions to limited partners
       ($0.80 per limited partner unit)          --          --             --     (2,400,000)        --         --     (2,400,000)
    Net income                                   --        (59)             --             --   2,394,217        --      2,394,158
                                        -----------  ------------ -------------  ------------- ----------- ----------   -----------

Balance, December 31, 1998              $     1,000  $   (1,610 ) $ 30,000,000   $ (5,882,464) $5,703,435  $(3,590,000) $26,230,361
                                        ===========  ============  =============  ============= =========  ===========  ===========
</TABLE>







                 See accompanying notes to financial statements.


<PAGE>


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

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                                   Year Ended December 31,
                                                                      1998                 1997                   1996
                                                                 ----------------     ----------------      ----------------
<S> <C>
Increase (Decrease) in Cash and Cash Equivalents:

      Cash Flows from Operating Activities:
         Cash received from tenants                                  $ 2,493,780          $2,502,057              $1,149,196
         Distributions from unconsolidated joint
             ventures                                                    145,839             106,346                   4,985
         Cash paid for expenses                                         (169,940 )          (183,068  )             (165,639)
         Interest received                                                51,240              69,779                 244,406
                                                                 ----------------     ----------------      ----------------
             Net cash provided by operating activities                 2,520,919           2,495,114               1,232,948
                                                                 ----------------     ----------------      ----------------

      Cash Flows from Investing Activities:
         Additions to land and buildings on operating
             leases                                                           --          (1,740,491  )          (19,735,346)
         Reimbursements of construction costs from
             developer                                                   306,100                  --                      --
         Investment in direct financing leases                                --          (1,130,497  )           (1,784,925)
         Investment in joint ventures                                   (124,452 )        (1,135,681  )             (201,501)
         Other                                                                --                  --                     410
                                                                 ----------------     ----------------      ----------------
             Net cash provided by (used in) investing
                activities                                               181,648          (4,006,669  )          (21,721,362)
                                                                 ----------------     ----------------      ----------------

   Cash Flows From Financing Activities:
      Reimbursement of acquisition and syndication
         costs paid by related parties on behalf of
         the Partnership                                                      --              (25,444 )            (326,483 )
      Contributions from limited partners                                     --                   --            24,303,079
      Contributions from holder of minority interest                          --              278,170               140,676
      Distributions to limited partners                               (2,400,000 )         (2,177,584 )            (703,681 )
      Distributions to holder of minority interest                       (49,023 )            (41,507 )                  --
      Payment of syndication costs                                            --                   --            (2,407,317 )
                                                                 ----------------     ----------------      ----------------
             Net cash provided by (used in) financing
                activities                                            (2,449,023 )         (1,966,365 )          21,006,274
                                                                 ----------------     ----------------      ----------------

Net Increase (Decrease) in Cash and Cash Equivalents                     253,544           (3,477,920 )             517,860

Cash and Cash Equivalents at Beginning of Year                         1,238,799            4,716,719             4,198,859
                                                                 ----------------     ----------------      ----------------

Cash and Cash Equivalents at End of Year                             $ 1,492,343           $1,238,799            $4,716,719
                                                                 ================     ================      ================
</TABLE>



                 See accompanying notes to financial statements.


<PAGE>


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

                      STATEMENTS OF CASH FLOWS - CONTINUED
<TABLE>
<CAPTION>


                                                                               Year Ended December 31,
                                                                    1998                1997                1996
                                                               ---------------     ----------------    ---------------
<S> <C>
Reconciliation of Net Income to Net Cash
   Provided by Operating Activities:

      Net income                                                   $2,394,158           $2,203,557         $1,095,759
                                                               ---------------     ----------------    ---------------
      Adjustments to reconcile net income to
         net cash provided by operating
         activities:
             Depreciation                                             358,063              376,973            176,995
             Amortization                                              11,146               10,319              2,213
             Minority interest in income of
                consolidated joint venture                             62,632               41,854                 --
             Equity in earnings of unconsolidated
                joint ventures, net of distributions                    5,244                5,428                151
             Decrease (increase) in receivables                       (33,350 )             39,518            (40,131 )
             Increase in prepaid expenses                                (510 )                 --                 --
             Decrease in net investment in direct
                financing leases                                       34,640               30,454             16,345
             Increase in accrued rental income                       (287,397 )           (293,699 )         (167,216 )
             Increase (decrease) in accounts
                payable and accrued expenses                              676                  (63 )            2,985
             Increase (decrease) in due to related
                parties, excluding acquisition
                and syndication costs paid on
                behalf of the Partnership                              11,573                  (97 )            2,596
             Decrease (increase) in rents paid in
                advance                                               (35,184 )              2,993             52,769
             Increase (decrease) in deferred
                rental income                                            (772 )             77,877             90,482
                                                               ---------------     ----------------    ---------------
                   Total adjustments                                  126,761              291,557            137,189
                                                               ---------------     ----------------    ---------------

Net Cash Provided by Operating Activities                          $2,520,919           $2,495,114         $1,232,948
                                                               ===============     ================    ===============

</TABLE>


                 See accompanying notes to financial statements.


<PAGE>


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

                      STATEMENTS OF CASH FLOWS - CONTINUED
<TABLE>
<CAPTION>


                                                                               Year Ended December 31,
                                                                   1998                  1997               1996
                                                               ---------------      ---------------    ----------------
<S> <C>
Supplemental Schedule of Non-Cash Investing
   and Financing Activities:

      Related parties paid certain
         acquisition and syndication
         costs on behalf
         of the Partnership as follows:
             Acquisition costs                                        $   --             $  11,262           $  69,836
             Syndication costs                                            --                    --             231,885
                                                                                    ---------------    ----------------
                                                               ---------------

                                                                      $   --             $  11,262           $ 301,721
                                                               ===============
                                                                                    ===============    ================

      Land and building under operating lease
         exchanged for land and building under
         operating lease                                           $ 899,654                $   --              $   --
                                                               ===============      ===============    ================

      Distributions declared and unpaid at
         December 31                                               $ 600,000             $ 600,000           $ 490,084
                                                               ===============      ===============    ================

</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, 1998, 1997, and 1996


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.
         Under the terms of a registration  statement  filed with the Securities
         and Exchange  Commission,  the  Partnership  was  authorized  to sell a
         maximum  of  3,000,000  units   ($30,000,000)  of  limited  partnership
         interest.   A  total  of  3,000,000  units   ($30,000,000)  of  limited
         partnership interest were sold.

         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 percent  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
         acquisition of land and buildings at cost,  including  acquisition  and
         closing costs. Land and buildings are leased to unrelated third parties
         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. The leases are accounted for
         using  either the  direct  financing  or the  operating  methods.  Such
         methods are described below:

                  Direct  financing  method - The 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) (see Note 4).  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  net
                  investment in the leases.

                  Operating  method - Land and  building  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  (including rental payments,  if
                  any,  required  during the  construction  of a property)  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.


<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1998, 1997, and 1996


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.  Whenever a tenant  defaults  under the
                  terms of its  lease,  or events  or  changes  in  circumstance
                  indicate  that the tenant will not lease the property  through
                  the end of the lease term, the Partnership  either reserves or
                  writes off the cumulative accrued rental income balance.

         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,  will be removed  from the  accounts  and gains or losses  from
         sales  will  be  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.  Although
         the general partners have made their best estimate of the factors based
         on current  conditions,  it is  reasonably  possible  that change could
         occur in the  near  term  which  could  adversely  affect  the  general
         partners' best estimate of net cash flows expected to be generated from
         its properties  and the need for asset  impairment  write downs.  If an
         impairment is indicated, the assets are adjusted to their fair value.

         When the  collection  of amounts  recorded as rental or other income is
         considered  to be  doubtful,  an  adjustment  is made to  increase  the
         allowance for doubtful accounts,  which is netted against  receivables,
         and to decrease rental or other income or increase bad debt expense for
         the  current  period,  although  the  Partnership  continues  to pursue
         collection of such amounts.  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 80
         percent   interest  in  CNL/GC  El  Cajon  Joint   Venture   using  the
         consolidation  method.  Minority interest represents the minority joint
         venture   partner's   proportionate   share  of  the   equity   in  the
         Partnership's  consolidated joint venture. All significant intercompany
         accounts and transactions have been eliminated.



<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1998, 1997, and 1996


1.       Significant Accounting Policies - Continued:

         The  Partnership's  investments  in CNL Kingston  Joint Venture and CNL
         Mansfield  Joint Venture,  and a property in Corpus  Christi,  Texas, a
         property  in  Akron,  Ohio,  and  a  property  in  Fayetteville,  North
         Carolina,  for which each  property is held as  tenants-in-common,  are
         accounted  for using the equity  method  since the  Partnership  shares
         control with affiliates which have the same general partners.

         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,  certificates of deposit and money market
         funds  (some  of which  are  backed  by  government  securities).  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,  certificates of deposit and money market
         funds may exceed federally insured levels; however, the Partnership has
         not  experienced any losses in such accounts.  The  Partnership  limits
         investment of temporary cash investments to financial institutions with
         high credit  standing;  therefore,  the Partnership  believes it is not
         exposed to any significant credit risk on cash and cash equivalents.

         Organization  Costs - Organization  costs are being amortized over five
         years  using the  straight-line  method.  In April 1998,  the  American
         Institute of Certified Public  Accountants issued Statement of Position
         98-5  "Reporting on the Costs of Start-Up  Activities."  The Statement,
         which is effective for fiscal years  beginning after December 15, 1998,
         requires that an entity  expense the costs of start-up  activities  and
         organization  costs as they are incurred.  The  Partnership  will adopt
         this statement in 1999. The general  partners  believe that adoption of
         this  statement  will not have a material  effect on the  Partnership's
         financial position or results of operations.

         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 are netted  against
         partners' capital and represent a reduction of Partnership equity and a
         reduction in the basis of each partner's investment (Note 6).



<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1998, 1997, and 1996


1.       Significant Accounting Policies - Continued:

         Weighted  Average  Number of Limited  Partner  Units  Outstanding - Net
         income and  distributions per limited partner unit are calculated based
         upon the  weighted  average  number  of units  of  limited  partnership
         interest outstanding during the period the Partnership was operational.

         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 accounted 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  years'  financial
         statements  have been  reclassified  to conform  to 1998  presentation.
         These  reclassifications  had no effect  on  partners'  capital  or net
         income.

2.       Leases:

         The Partnership  leases its land and buildings to operators of national
         and regional  fast-food and  family-style  restaurants.  The leases are
         accounted for under the provisions of Statement of Financial Accounting
         Standards  No.  13,  "Accounting  for  Leases."  Some of the leases are
         classified  as  operating  leases  and  some of the  leases  have  been
         classified as direct  financing  leases.  For the leases  classified as
         direct financing  leases,  the building portions of the property leases
         are accounted for as direct  financing leases while the land portion of
         the leases are  operating  leases.  Leases are  generally  for 15 to 20
         years and provide for minimum and contingent rentals. In addition,  the
         tenant pays all property  taxes and  assessments,  fully  maintains the
         interior and exterior of the  building and carries  insurance  coverage
         for public liability,  property damage, fire and extended coverage. The
         lease  options  generally  allow tenants to renew the leases for two to
         five  successive  five-year  periods  subject  to the  same  terms  and
         conditions as 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.



<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1998, 1997, and 1996


3.       Land and Buildings on Operating Leases:

         Land and  buildings on operating  leases  consisted of the following at
         December 31:
<TABLE>
<CAPTION>

                                                                    1998                  1997
                                                              -----------------     -----------------
<S> <C>
                  Land                                            $ 10,359,513          $ 10,357,191
                  Buildings                                         11,164,432            11,525,646
                                                              -----------------     -----------------
                                                                    21,523,945            21,882,837
                  Less accumulated depreciation                       (875,817 )            (553,968 )
                                                              -----------------     -----------------

                                                                  $ 20,648,128          $ 21,328,869
                                                              =================     =================
</TABLE>

         In June 1998, the tenant of the property in Troy,  Ohio,  exercised its
         option  under  the  terms of its  lease  agreement  to  substitute  the
         existing property for a replacement property. In conjunction therewith,
         the  Partnership  exchanged the Boston Market  property in Troy,  Ohio,
         with a Boston Market property in Inglewood,  California.  The lease for
         the  property  in Troy,  Ohio,  was  amended to allow the  property  in
         Inglewood,  California  to  continue  under the  terms of the  original
         lease.  All  closing  costs were paid by the  tenant.  The  Partnership
         accounted  for this as a  nonmonetary  exchange  of similar  assets and
         recorded the acquisition of the property in Inglewood,  California,  at
         the net book value of the property in Troy,  Ohio.  No gain or loss was
         recognized due to this being accounted for as a nonmonetary exchange of
         similar assets.

         Some leases provide for escalating  guaranteed minimum rents throughout
         the  lease  term.   Income  from  these  scheduled  rent  increases  is
         recognized on a straight-line  basis over the terms of the leases.  For
         the years ended  December 31, 1998,  1997,  and 1996,  the  Partnership
         recognized  $287,397,  $293,699,  and $167,216,  respectively,  of such
         rental income.



<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1998, 1997, and 1996


3.       Land and Buildings on Operating Leases - Continued:

         The following is a schedule of the future  minimum lease payments to be
         received on noncancellable operating leases at December 31, 1998:

                1999                                  $2,140,644
                2000                                   2,153,281
                2001                                   2,246,506
                2002                                   2,303,258
                2003                                   2,316,816
                Thereafter                            27,421,272
                                                -----------------

                                                     $38,581,777
                                                =================

         Since  lease  renewal  periods  are  exercisable  at the  option of the
         tenant, the above table only presents future minimum lease payments due
         during  the  initial  lease  terms.  In  addition,  this table does not
         include any amounts for future contingent rentals which may be received
         on the leases based on a percentage of the tenant's gross sales.

4.       Net Investment in Direct Financing Leases:

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

                                                                              1998                 1997
                                                                          --------------      ---------------
<S> <C>
                       Minimum lease payments
                           receivable                                       $ 7,145,730          $ 7,636,851
                       Estimated residual values                                765,563              775,896
                       Less unearned income                                  (4,930,482 )         (5,355,964 )
                                                                          --------------       -------------
                           Net investment in direct
                              financing leases                              $ 2,980,811          $ 3,056,783
                                                                          ==============      ===============
</TABLE>



<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1998, 1997, and 1996


4.       Net Investment in Direct Financing Leases - Continued:

         The  following  is a schedule of future  minimum  lease  payments to be
         received on direct financing leases at December 31, 1998:

                1999                               $ 407,310
                2000                                 407,310
                2001                                 407,310
                2002                                 407,310
                2003                                 407,310
                Thereafter                         5,109,180
                                             ----------------

                                                  $7,145,730
                                             ================

         The above table does not include  future  minimum  lease  payments  for
         renewal  periods or for contingent  rental payments that may become due
         in future periods (see Note 3).

5.       Investment in Joint Ventures:

         In October 1996,  the  Partnership  acquired an  approximate 20 percent
         interest   in  a  property  in   Fayetteville,   North   Carolina,   as
         tenants-in-common,  with an  affiliate  of the  general  partners.  The
         Partnership  accounts for its  investment  in this  property  using the
         equity method since the  Partnership  shares control with an affiliate,
         and amounts  relating to its  investment  are included in investment in
         joint ventures.

         In January 1997,  the  Partnership  acquired an  approximate 27 percent
         interest in a property in Corpus Christi,  Texas, and an approximate 37
         percent   interest   in  a   property   in   Akron,   Ohio,   each   as
         tenants-in-common,   with  affiliates  of  the  general  partners.  The
         Partnership  accounts for its investment in these  properties using the
         equity method since the Partnership shares control with affiliates, and
         amounts  relating to these  investments  are included in  investment in
         joint ventures.

         In  February  1997,  the  Partnership  entered  into  a  joint  venture
         arrangement,  CNL  Mansfield  Joint  Venture,  with an affiliate of the
         Partnership which has the same general partners, to hold one restaurant
         property in Mansfield,  Texas. As of December 31, 1997, the Partnership
         had contributed $163,964 to the joint venture to acquire the restaurant
         property.  As of December 31, 1998, the Partnership  owned a 21 percent
         interest  in  the  profits  and  losses  of  the  joint  venture.   The
         Partnership accounts for its investment in this joint venture under the
         equity method since the Partnership shares control with the affiliate.



<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1998, 1997, and 1996


5.       Investment in Joint Ventures - Continued:

         In  September  1997,  the  Partnership  entered  into a  joint  venture
         arrangement,  CNL  Kingston  Joint  Venture,  with an  affiliate of the
         Partnership which has the same general partners,  to construct and hold
         one restaurant  property.  As of December 31, 1998, the Partnership had
         contributed $311,048 to CNL Kingston Joint Venture to fund construction
         costs  relating  to the  property  owned by the  joint  venture.  As of
         December  31,  1998,  the  Partnership  owned a 60.06%  interest in the
         profits and losses of the joint venture.  The Partnership  accounts for
         its  investment in this joint venture under the equity method since the
         Partnership shares control with an affiliate.

         CNL Mansfield  Joint Venture and CNL Kingston  Joint  Venture,  and the
         Partnership  and  affiliates,  as  tenants-in-common  in three separate
         tenancy-in-common  arrangements,  each own and lease one property to an
         operator  of  national  fast-food  or  family-style  restaurants.   The
         following presents the combined,  condensed  financial  information for
         the joint ventures and the properties  held as  tenants-in-common  with
         affiliates at December 31:
<TABLE>
<CAPTION>

                                                                               1998                 1997
                                                                          ---------------      ---------------
<S> <C>
                Land and buildings on operating
                    lease, less accumulated
                    depreciation                                              $4,412,584           $4,495,671
                Cash                                                               2,352                8,936
                Accrued rental income                                            134,121               65,395
                Other assets                                                          87                1,931
                Liabilities                                                       11,918              228,896
                Partners' capital                                              4,537,226            4,343,037
                Revenues                                                         554,934              453,481
                Net income                                                       458,588              375,257
</TABLE>

5.       Investment in Joint Ventures - Continued:

         The Partnership  recognized income totalling  $140,595,  $100,918,  and
         $4,834 for the years ended December 31, 1998, 1997, and 1996 from these
         joint  ventures  and  the  properties  held as  tenants-in-common  with
         affiliates.

6.       Syndication Costs:

         Syndication  costs  consisting  of  legal  fees,  commissions,   a  due
         diligence  expense  reimbursement  fee,  printing  and  other  expenses
         incurred in connection  with the offering  totalled  $3,590,000.  These
         offering  expenses  were  charged  to  the  limited  partners'  capital
         accounts to reflect the net capital proceeds of the offering.


<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1998, 1997, and 1996


7.       Allocations and Distributions:

         Generally,  distributions  of net cash flow,  as defined in the limited
         partnership  agreement of the  Partnership,  are made 95 percent 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 will be subordinated to
         receipt  by the  limited  partners  in that  year of an  eight  percent
         noncumulative, noncompounded return on their aggregate invested capital
         contributions (the "Limited Partners' 8% Return").

         Generally,  net income  (determined  without regard to any depreciation
         and  amortization  deductions  and  gains and  losses  from the sale of
         properties) is 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
         percent  to the  limited  partners  and  one  percent  to  the  general
         partners.   All  deductions  for   depreciation  and  amortization  are
         allocated  99 percent to the  limited  partners  and one percent to the
         general partners.

         Net sales  proceeds from the sale of a property not in  liquidation  of
         the  Partnership  generally  will be  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 will then receive 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 will be distributed 95 percent to the
         limited partners and five percent to the general partners.

         Any  gain  from  the  sale of a  property,  not in  liquidation  of the
         Partnership,  is in general,  allocated in the same manner as net sales
         proceeds are distributable.  Any loss is, 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 percent 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 - CONTINUED

                  Years Ended December 31, 1998, 1997, and 1996


7.       Allocations and Distributions - Continued:

         During  the  years  ended  December  31,  1998,  1997,  and  1996,  the
         Partnership   declared   distributions   to  the  limited  partners  of
         $2,400,000, $2,287,500, and $1,166,689,  respectively. 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 - CONTINUED

                  Years Ended December 31, 1998, 1997, and 1996


8.       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>
<CAPTION>

                                                                     1998               1997               1996
                                                                 --------------     --------------     --------------
<S> <C>
             Net income for financial reporting purposes            $2,394,158         $2,203,557         $1,095,759

             Depreciation for financial reporting purposes
                 in excess of (less than) depreciation for
                 tax reporting purposes                                 (1,069 )           25,005             13,226

             Direct financing leases recorded as operating
                 leases for tax reporting purposes                      34,640             30,454             16,345

             Equity in earnings of unconsolidated joint
                 ventures    for    financial    reporting
             purposes in
                 excess of equity in earnings of
                 unconsolidated joint ventures for tax                 (13,489 )           (3,650 )             (479 )
                 reporting purposes

             Minority interest in timing differences of
                 consolidated joint venture                             23,280                217                 --

             Capitalization of transaction costs for tax
                 reporting purposes                                     14,139                 --                 --

             Capitalization of administrative expenses for
                 tax reporting purposes                                     --              1,557             11,940

             Amortization for tax reporting purposes (in
                 excess of) less than amortization for
                 financial reporting purposes                            1,539              1,667             (2,025 )

             Accrued rental income                                    (287,397 )         (293,699 )         (167,216 )

             Deferred rental income                                     (9,208 )           80,635             90,482

             Rents paid in advance                                     (35,184 )            2,993             52,769

             Allowance for doubtful accounts                           (13,050 )            9,865              4,163

             Other                                                       5,680                 --                 --
                                                                 --------------     --------------     --------------

             Net income for federal income tax purposes             $2,114,039         $2,058,601        $ 1,114,964
                                                                 ==============     ==============     ==============

</TABLE>


<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1998, 1997, and 1996


9.       Related Party Transactions:

         One of the individual general partners, James M. Seneff, Jr., is one of
         the principal  shareholders  of CNL Group,  Inc., the parent company of
         CNL  Securities  Corp.  and majority  stockholder of CNL Fund Advisors,
         Inc. James M. Seneff,  Jr. is director and chief  executive  officer of
         CNL  Securities  Corp.  and  is  director,  chairman  of the  board  of
         directors and chief  executive  officer of CNL Fund Advisors,  Inc. The
         other  individual  general partner,  Robert A. Bourne,  is director and
         president of CNL Securities  Corp.,  is director,  vice chairman of the
         board of directors and treasurer of CNL Fund Advisors,  Inc. and served
         as president of CNL Fund Advisors, Inc. through October 31, 1997.

         For  the  year  ended  December  31,  1996,  the  Partnership  incurred
         $2,065,762  in  syndication  costs  due to  CNL  Securities  Corp.  for
         services in connection with selling limited  partnership  interests.  A
         substantial portion of this amount ($1,913,661) was paid as commissions
         to other broker-dealers.

         In addition,  for the year ended  December 31,  1996,  the  Partnership
         incurred $121,515 as a due diligence  expense  reimbursement fee due to
         CNL  Securities  Corp.  This fee  equals  0.5% of the  limited  partner
         contributions of $30,000,000. The majority of this fee was reallowed to
         other broker-dealers for payment of bona fide due diligence expenses.

         Additionally,  the Partnership  incurred  $1,093,639 for the year ended
         December 31, 1996 in acquisition  fees due to CNL Fund  Advisors,  Inc.
         for services in finding, negotiating and acquiring properties on behalf
         of the Partnership.  In total, these fees represent 4.5% of the limited
         partner capital contributions of $30,000,000.

         During the years ended  December 31,  1998,  1997,  and 1996,  CNL Fund
         Advisors,  Inc.  acted  as  manager  of  the  Partnership's  properties
         pursuant to a management agreement with the Partnership.  In connection
         therewith,  the  Partnership  agreed to pay CNL Fund Advisors,  Inc. an
         annual, management fee 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.  The management
         fee,  which will not  exceed  fees which are  competitive  for  similar
         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 CNL Fund Advisors,
         Inc.  All or 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 CNL Fund  Advisors,  Inc.  shall  determine.  The
         Partnership  incurred management fees of $26,690,  $25,377, and $10,482
         for the years ended December 31, 1998, 1997, and 1996.


<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1998, 1997, and 1996


9.       Related Party Transactions - Continued:

         During the years ended December 31, 1998,  1997,  and 1996,  Affiliates
         provided  accounting  and  administrative  services to the  Partnership
         (including  accounting and  administrative  services in connection with
         the offering of units) on a day-to-day basis. The expenses incurred for
         these services were classified as follows:
<TABLE>
<CAPTION>

                                                                     1998               1997                1996
                                                                 --------------     --------------     ---------------
<S> <C>
                  Syndication costs                                     $   --             $   --           $ 177,683
                  General operating and
                      administrative expenses                           91,124             90,700              96,729
                                                                 --------------     --------------     ---------------
                                                                      $ 91,124           $ 90,700           $ 274,412
                                                                 ==============     ==============     ===============
</TABLE>

         The due to  related  parties at  December  31,  1998 and 1997  totalled
         $14,448 and $2,875 respectively.

         During 1996, the  Partnership  acquired from  affiliates of the general
         partners three properties, one of which was held with another affiliate
         as  tenants-in-common,  for an aggregate  purchase price of $1,667,140.
         The  affiliates of the general  partners had purchased and  temporarily
         held title to these  properties in order to facilitate the  acquisition
         of these properties by the Partnership. The purchase prices paid by the
         Partnership  represented  the costs  incurred by the  affiliates of the
         general partners to acquire the properties, including closing costs.

         During 1997, the  Partnership  and  affiliates of the general  partners
         acquired two properties as tenants-in-common  for an aggregate purchase
         price of  $718,932  from CNL BB  Corp.,  an  affiliate  of the  general
         partners.  CNL BB Corp.  had  purchased and  temporarily  held title to
         these  properties  in  order  to  facilitate  the  acquisition  of  the
         properties by the Partnership  and the  affiliates.  The purchase price
         paid  by the  Partnership  and the  affiliates  represented  the  costs
         incurred by CNL BB Corp. to acquire and carry the  property,  including
         closing costs.



<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1998, 1997, and 1996


10.      Concentration of Credit Risk:

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

                                                                 1998               1997               1996
                                                             -------------     ---------------     -------------
<S> <C>
               Golden Corral Corporation                         $461,527            $467,275          $286,307
               DenAmerica Corp.                                   432,423             427,800           250,535
               National Restaurant
                   Enterprises, Inc.                              421,988             376,461           197,882
               Foodmaker, Inc.                                    349,514             326,007               N/A
               San Diego Food Holdings, Inc.                      316,038                 N/A               N/A
               RTM Indianapolis, Inc.
                   and RTM Southwest,
                   Texas, Inc.                                        N/A                 N/A           133,200
</TABLE>

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

                                                                 1998              1997               1996
                                                             -------------     --------------     -------------
<S> <C>
                  Golden Corral Family
                      Steakhouse Restaurants                     $777,565           $680,316          $286,307
                  Burger King                                     459,036            410,876           197,882
                  Jack in the Box                                 349,514            326,007               N/A
                  Boston Market                                   309,576            299,744               N/A
                  Arby's                                              N/A                N/A           133,200
                  Denny's                                             N/A                N/A           250,535
</TABLE>

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


<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1998, 1997, and 1996


10.      Concentration of Credit Risk - Continued:

         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 could significantly  impact the results of operations
         of the  Partnership  if the  Partnership  is not able to  re-lease  the
         properties in a timely manner.

         During 1998,  the tenants of three Boston Market  properties  filed for
         bankruptcy.  While the tenant has not rejected or affirmed  these three
         leases,  there can be no assurance  that some or all of the leases will
         not be rejected in the future.  The lost  revenues  resulting  from the
         rejection  of all three  leases  could  have an  adverse  effect on the
         results of operations of the  Partnership if the  Partnership is unable
         to re-lease these Properties in a timely manner.

11.      Subsequent Events:

         In January 1999, the Partnership invested in a property in Zephyrhills,
         Florida,    with   an   affiliate   of   the   general    partners   as
         tenants-in-common.  The Partnership contributed  approximately $169,100
         for a 24 percent interest in the property. The Partnership will account
         for its  investment in this property  using the equity method since the
         Partnership will share control with affiliates. In addition, in January
         1999, the  Partnership  used a portion of these amounts to enter into a
         joint  venture  arrangement,   Ocean  Shores  Joint  Venture,  with  an
         affiliate of the general partners to hold one restaurant property.  The
         Partnership contributed  approximately $360,000 to the joint venture to
         acquire the restaurant property. The Partnership owns a 30.94% interest
         in the profits and losses of the joint venture and will account for its
         investment  in this joint  venture  under the equity  method  since the
         Partnership shares control with the affiliate.

         On March 11, 1999, the  Partnership  entered into an Agreement and Plan
         of Merger with CNL American Properties Fund, Inc. ("APF"),  pursuant to
         which the Partnership would be merged with and into a subsidiary of APF
         (the  "Merger").  As  consideration  for the Merger,  APF has agreed to
         issue 3,014,377  shares of its common stock, par value $0.01 per shares
         (the "APF  Shares")  which,  for the  purposes  of  valuing  the merger
         consideration,  have been  valued by APF at $10.00 per APF  Share,  the
         price paid by APF  investors in APF's most recent public  offering.  In
         order to assist the general  partners in evaluating the proposed merger
         consideration,  the general partners retained Valuation  Associates,  a
         nationally  recognized  real estate  appraisal  firm,  to appraise  the
         Partnership's   restaurant  property  portfolio.   Based  on  Valuation
         Associates'  appraisal,  the Partnership's property portfolio and other
         assets were valued on a going  concern basis  (meaning the  Partnership
         continues unchanged) at $29,681,344 as of December 31, 1998. Legg Mason
         Wood Walker,  Incorporated has rendered a fairness opinion that the APF
         Share consideration,  payable by APF, is fair to the Partnership from a
         financial point of view.


<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1998, 1997, and 1996


11.      Subsequent Events - Continued:

         The APF Shares are  expected  to be listed for  trading on the New York
         Stock Exchange  concurrently with the consummation of the Merger,  and,
         therefore, would be freely tradable at the option of the former limited
         partners.  At a special  meeting of the partners that is expected to be
         held in the third quarter of 1999,  limited  partners holding in excess
         of 50% of the Partnership's  outstanding limited partnership  interests
         must approve the Merger prior to consummation of the  transaction.  The
         general  partners intend to recommend that the limited  partners of the
         Partnership    approve   the   Merger.   In   connection   with   their
         recommendation,  the general  partners  will solicit the consent of the
         limited partners at the special meeting. If the limited partners reject
         the Merger,  the  Partnership  will bear the portion of the transaction
         costs based upon the percentage of "For" votes and the general partners
         will  bear  the  portion  of such  transaction  costs  based  upon  the
         percentage of "Against" votes and abstentions.




<PAGE>


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

         None.


                                    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 Fund Advisors,  Inc., CNL Group,  Inc. and their
affiliates, all of which are affiliates of the General Partners.

         James M. Seneff, Jr., age 52, is a principal  stockholder of CNL Group,
Inc., a diversified  real estate company,  and has served as its Chairman of the
Board of Directors,  a director and Chief Executive  Officer since its formation
in 1980. Mr. Seneff has been Chairman of the Board of Directors,  director,  and
Chief Executive Officer of CNL Securities Corp. since its formation in 1979. Mr.
Seneff also has held the position of Chairman of the Board of  Directors,  Chief
Executive  Officer,   President  and  director  of  CNL  Management  Company,  a
registered investment advisor,  since its formation in 1976, has served as Chief
Executive  Officer,  Chairman  of the Board  and a  director  of CNL  Investment
Company,  has served as Chief Executive  Officer, a director and Chairman of the
Board of Directors of Commercial Net Lease Realty, Inc., a publicly-traded REIT,
listed on the NYSE, since 1992,  served as Chief Executive  Officer,  a director
and  Chairman of the Board of Directors of CNL Realty  Advisors,  Inc.  from its
inception in May 1992 through  December  1997, at which time such company merged
with  Commercial  Net Lease  Realty,  Inc.,  and has held the  position of Chief
Executive  Officer,  Chairman of the Board and a director  of CNL  Institutional
Advisors, Inc., a registered investment advisor, since its inception in December
1990.  Mr.  Seneff  has  served as  Chairman  of the Board of  Directors  of CNL
American  Properties  Fund, Inc. since December 1994 and as a director and Chief
Executive  Officer  since May 1994.  Mr.  Seneff has served as  Chairman  of the
Board,  Chief Executive Officer and a director of CNL Fund Advisors,  Inc. since
March 1994.  Mr.  Seneff has served as Chairman  of the Board,  Chief  Executive
Officer and a director of CNL Hospitality  Properties,  Inc. since June 1996 and
of CNL Hospitality Advisors, Inc. since January 1997. Mr. Seneff has also served
as Chairman of the Board,  Chief Executive  Officer and a director of CNL Health
Care  Properties,  Inc. since  December 1997 and CNL Health Care Advisors,  Inc.
since July 1997. 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 advises 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 more then $60 billion of retirement  funds.
Mr.  Seneff  has  served as a member of the board of  directors  of First  Union
National  Bank of  Florida  since  May 1998 and has  served  as a member  of the
Orlando Advisory Board of First Union National Bank of Florida since March 1994.
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 joint  venturer  in over 100 real
estate ventures involved in the financing, acquisition, construction, and rental
of restaurants,  office buildings,  apartment complexes,  hotels, and other real
estate.  Included in these real estate ventures are  approximately  65 privately
offered  real  estate  limited  partnerships  in which Mr.  Seneff,  directly or
through an affiliated  entity,  serves or has served as a general partner.  Also
included are CNL Income Fund,  Ltd.,  CNL Income Fund II, Ltd.,  CNL Income Fund
III,  Ltd.,  CNL Income Fund IV, Ltd.,  CNL Income Fund V, Ltd., CNL Income Fund
VI, Ltd., CNL Income Fund VII, Ltd., CNL Income Fund VIII, Ltd., CNL Income Fund
IX, Ltd.,  CNL Income Fund X, Ltd.,  CNL Income Fund XI,  Ltd.,  CNL Income Fund
XII,  Ltd.,  CNL Income Fund XIII,  Ltd.,  CNL Income Fund XIV, Ltd., CNL Income
Fund XV, Ltd.,  CNL Income Fund XVI,  Ltd. and CNL Income Fund XVIII,  Ltd. (the
"CNL Income Fund  Partnerships"),  public real estate limited  partnerships with
investment  objectives similar to those of the Partnership,  in which Mr. Seneff
serves as a  general  partner.  Mr.  Seneff  received  his  degree  in  Business
Administration from Florida State University in 1968.

         Robert A.  Bourne,  age 51, is  President  and  Treasurer of CNL Group,
Inc.,  President,  Treasurer,  a director,  and a  registered  principal  of CNL
Securities  Corp.,  President,  Treasurer,  and a  director  of  CNL  Investment
Company,  and  Chief  Investment  Officer,  a  director  and  Treasurer  of  CNL
Institutional Advisors, Inc., a registered investment advisor. Mr. Bourne served
as President of CNL Institutional  Advisor,  Inc. from the date of its inception
through  July 1997.  Mr.  Bourne  served as President  of  Commercial  Net Lease
Realty,  Inc.  from July 1992 through  February  1996,  served as Secretary  and
Treasurer from February 1996 through December 1997, and has served as a director
since July 1992 and as Vice  Chairman of the Board of Directors  since  February
1996. In addition,  Mr. Bourne served as President of CNL Realty Advisors,  Inc.
from May 1992 through  February  1996,  served as Treasurer  from  February 1996
through  December 1997,  served as a director from May 1992 through December 31,
1997 and served as Vice Chairman from  February 1996 through  December  1997, at
which time such company merged with Commercial Net Lease Realty, Inc. Mr. Bourne
has served as a Vice  Chairman of the Board of  Directors  and  Treasurer of CNL
American  Properties  Fund,  Inc.  since February 1999, has served as a director
since May 1994 and previously served as President from May 1994 through February
1999. Mr. Bourne has served as a director of CNL Fund Advisors, Inc. since March
1994, has served as Treasurer and Vice Chairman of the Board of Directors  since
September  1997,  and  previously  served as  President  from March 1994 through
September  1997.  Mr.  Bourne has  served as  President  and a  director  of CNL
Hospitality  Properties,  Inc. since June 1996 and of CNL Hospitality  Advisors,
Inc.  since January 1997. Mr. Bourne has served as President and director of CNL
Health Care  Properties,  Inc. since December 1997 and CNL Health Care Advisors,
Inc. since July 1997. Mr. Bourne,  who joined CNL Securities  Corp. in 1979, has
participated  as a general  partner or joint  venturer  in over 100 real  estate
ventures  involved in the financing,  acquisition,  construction,  and rental of
restaurants,  office  buildings,  apartment  complexes,  hotels,  and other real
estate.  Included in these real estate ventures are  approximately  64 privately
offered  real  estate  limited  partnerships  in which Mr.  Bourne,  directly or
through an affiliated  entity,  serves or has served as a general partner.  Also
included  are the CNL Income  Fund  Partnerships,  public  real  estate  limited
partnerships with investment objectives similar to those of the Partnership,  in
which  Mr.  Bourne  serves as a  general  partner.  Mr.  Bourne  formerly  was a
certified public  accountant with Coopers & Lybrand and a partner in the firm of
Bourne & Rose, P.A. Mr. Bourne received a B.A. in Accounting,  with honors, from
Florida State University in 1970.

         CNL Realty Corporation is a corporation organized on November 26, 1985,
under the laws of the State of Florida.  Its sole directors and shareholders are
James M. Seneff, Jr. and Robert A. Bourne, the individual General Partners.  CNL
Realty  Corporation  was organized to serve as the corporate  general partner of
real estate limited partnerships,  such as the Partnership,  organized by one or
both of the individual General Partners. CNL Realty Corporation currently serves
as the corporate general partner of the CNL Income Fund Partnerships.

         CNL  Fund  Advisors,  Inc.  provides  certain  management  services  in
connection with the Partnership and its Properties. CNL Fund Advisors, Inc. is a
corporation  organized  in 1994 under the laws of the State of Florida,  and its
principal  office is located at 400 East South Street,  Orlando,  Florida 32801.
CNL Fund  Advisors,  Inc. is a majority owned  subsidiary of CNL Group,  Inc., a
diversified  real  estate  company,   and  was  organized  to  perform  property
acquisition, property management and other services.

         CNL  Group,  Inc.,  which is the parent  company of CNL Fund  Advisors,
Inc.,  was organized in 1980 under the laws of the State of Florida.  CNL Group,
Inc. is a diversified  real estate  company which  provides a wide range of real
estate,  development  and  financial  services to companies in the United States
through the  activities  of its  subsidiaries.  These  activities  are primarily
focused  on the  franchised  restaurant  and  hospitality  industries.  James M.
Seneff,  Jr., an individual General Partner of the Partnership,  is the Chairman
of the Board,  Chief Executive  Officer,  and a director of CNL Group,  Inc. Mr.
Seneff and his wife own all of the outstanding shares of CNL Group, Inc.

         The following persons serve as operating officers of CNL Group, Inc. or
its affiliates or  subsidiaries  in the discretion of the Boards of Directors of
those companies,  but, except as specifically indicated, do not serve as members
of the Boards of Directors of those  entities.  The Boards of Directors have the
responsibility for creating and implementing the policies of CNL Group, Inc. and
its affiliated companies.

         Curtis B. McWilliams,  age 43, joined CNL Group, Inc. in April 1997 and
currently serves as an Executive Vice President. In addition, Mr. McWilliams has
served  as  President  of  CNL  Fund  Advisors,  Inc.  and as  President  of the
Restaurant  and Financial  Services  Groups within CNL Group,  Inc.  since April
1997. Mr.  McWilliams has served as President of CNL American  Properties  Fund,
Inc. since February 1999 and previously  served as Executive Vice President from
February 1998 through February 1999. From September 1983 through March 1997, Mr.
McWilliams  was employed by Merrill  Lynch & Co.,  most  recently as Chairman of
Merrill  Lynch's  Private  Advisory  Services until March 1997.  Mr.  McWilliams
received a B.S.E. in Chemical  Engineering from Princeton University in 1977 and
a Masters of Business  Administration  with a concentration  in finance from the
University of Chicago in 1983.

         John T. Walker,  age 40, has served as Executive  Vice President of CNL
American  Properties  Fund, Inc. since January 1996, as Chief Operating  Officer
since March 1995, and previously  served as Senior Vice President since December
1994. In addition, Mr. Walker has served as Executive Vice President of CNL Fund
Advisors, Inc. since January 1996, Chief Operating Officer since April 1995, and
previously  served as Senior Vice President  from November 1994 through  January
1996. In addition,  Mr. Walker  previously served as Executive Vice President of
CNL Hospitality  Properties,  Inc. and CNL Hospitality  Advisors,  Inc. From May
1992 to May 1994, Mr. Walker, a certified public accountant,  was Executive Vice
President for Finance and Administration and Chief Financial Officer of Z Music,
Inc.,   a  cable   television   network   (subsequently   acquired   by  Gaylord
Entertainment),   where  he  was   responsible   for   overall   financial   and
administrative  management  and planning.  From January 1990 through April 1992,
Mr. Walker was Chief  Financial  Officer of the First Baptist Church in Orlando,
Florida.  From  April  1984  through  December  1989,  he was a  partner  in the
accounting firm of Chastang, Ferrell & Walker, P.A., where he was the partner in
charge of audit and consulting services, and from 1981 to 1984, Mr. Walker was a
Senior  Consultant/Audit  Senior at Price Waterhouse.  Mr. Walker is a Cum Laude
graduate of Wake Forest University with a B.S. in Accountancy and is a certified
public accountant.

         Lynn E. Rose,  age 50, a  certified  public  accountant,  has served as
Secretary of CNL American  Properties  Fund, Inc. since December 1994 and served
as Treasurer from December 1994 through  February 1999. Ms. Rose has served as a
director  and  Secretary of CNL Fund  Advisors,  Inc.  since March 1994,  and as
Treasurer  from the date of its  inception  through June 30, 1997.  Ms. Rose has
served as Secretary of CNL Group, Inc. since 1987, as Chief Financial Officer of
CNL Group, Inc. since December 1993, and served as Controller of CNL Group, Inc.
from 1987  until  December  1993.  In  addition,  Ms.  Rose has  served as Chief
Financial Officer and Secretary of CNL Securities Corp. since July 1994. She has
served as Chief Operating Officer, Vice President and Secretary of CNL Corporate
Services,  Inc. since November 1994. Ms. Rose also has served as Chief Financial
Officer and Secretary of CNL Institutional Advisors, Inc. since its inception in
1990, as Treasurer of CNL Realty Advisors,  Inc. from 1991 to February 1996, and
as Secretary and a director of CNL Realty Advisors,  Inc. since its inception in
1991 until  December 31, 1997, at which time CNL Realty  Advisors,  Inc.  merged
with Commercial Net Lease Realty, Inc. In addition, Ms. Rose served as Secretary
and Treasurer of Commercial  Net Lease Realty,  Inc. from 1992 to February 1996.
Ms. Rose also serves as Secretary and Treasurer of CNL  Hospitality  Properties,
Inc. and CNL Health Care  Properties,  Inc. and as  Secretary,  Treasurer  and a
director of CNL Hospitality  Advisors,  Inc. and CNL Health Care Advisors,  Inc.
Ms. Rose also  currently  serves as Secretary  for  approximately  50 additional
corporations.  Ms.  Rose  oversees  the  legal  compliance,  accounting,  tenant
compliance,  and reporting  for over 250  corporations,  partnerships  and joint
ventures.  Prior to joining CNL, Ms. Rose was a partner with Robert A. Bourne in
the accounting firm of Bourne & Rose, P.A.,  Certified Public  Accountants.  Ms.
Rose holds a B.A. in Sociology from the University of Central Florida.

         Jeanne A. Wall,  age 40, has served as Executive  Vice President of CNL
American  Properties  Fund,  Inc.  since  December  1994. Ms. Wall has served as
Executive  Vice  President of CNL Fund  Advisors,  Inc. since November 1994, and
previously  served as Vice President from March 1994 through  November 1994. Ms.
Wall has served as Chief Operating Officer of CNL Investment  Company and of CNL
Securities  Corp. since November 1994 and has served as Executive Vice President
of CNL  Investment  Company since January 1991.  Ms. Wall joined CNL  Securities
Corp. in 1984. In 1985, Ms. Wall became Vice  President of CNL Securities  Corp.
In 1987, she became Senior Vice President and in July 1997 she became  Executive
Vice  President of CNL  Securities  Corp. In this  capacity,  Ms. Wall serves as
national  marketing and sales director and oversees the national  marketing plan
for  the CNL  investment  programs.  In  addition,  Ms.  Wall  oversees  product
development,  partnership  administration  and  investor  services  for programs
offered  through  participating  brokers and  corporate  communications  for CNL
Group,  Inc.  and its  affiliates.  Ms.  Wall also has  served  as  Senior  Vice
President of CNL Institutional Advisors,  Inc., a registered investment advisor,
from 1990 to 1993,  as Vice  President of CNL Realty  Advisors,  Inc.  since its
inception in 1991 until  December 31, 1997,  at which time CNL Realty  Advisors,
Inc. merged with Commercial Net Lease Realty, Inc., and served as Vice President
of  Commercial  Net Lease Realty,  Inc. from 1992 through  December 31, 1997. In
addition,  Ms.  Wall  serves as  Executive  Vice  President  of CNL  Hospitality
Properties,  Inc., CNL Hospitality  Advisors,  Inc., CNL Health Care Properties,
Inc.  and CNL Health  Care  Advisors,  Inc.  Ms.  Wall holds a B.A.  in Business
Administration  from  Linfield  College  and is a  registered  principal  of CNL
Securities  Corp.  Ms.  Wall  currently  serves as a trustee on the board of the
Investment Program Association and on the Direct Participation Program committee
for the National Association of Securities Dealers (NASD).

         Steven D.  Shackelford,  age 35, a  certified  public  accountant,  has
served as Chief Financial  Officer of CNL American  Properties  Fund, Inc. since
January 1997 and as Chief  Financial  Officer of CNL Fund  Advisors,  Inc. since
September  1996.  From  March 1995 to July 1996,  Mr.  Shackelford  was a senior
manager in the national office of Price  Waterhouse 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 served as a manager in the
Price Waterhouse, Paris, France office


<PAGE>


serving several  multinational  clients.  Mr. Shackelford was an audit staff and
audit  senior  from  1986  to 1992  in the  Orlando,  Florida  office  of  Price
Waterhouse.  Mr. Shackelford  received a B.A. in Accounting,  with honors, and a
Masters of Business Administration from Florida State University.


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.


Item 12.  Security Ownership of Certain Beneficial Owners and Management

         As of March 11,  1999,  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 11, 1999,  the beneficial
ownership interests of the General Partners in the Registrant.
<TABLE>
<CAPTION>


                  Title of Class                 Name of Partner                     Percent of Class
<S> <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.  On March 11,  1999,  the
Registrant  entered  into an  Agreement  and Plan of  Merger  with CNL  American
Properties  Fund, Inc.  ("APF") pursuant to which the Registrant would be merged
with and into a subsidiary of APF (the "Merger").  For further  discussion,  see
Item 8. Financial Statements and Supplementary Data -- Note 11.
Subsequent Events.



<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, 1998,  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>
<CAPTION>

                                                                                                 Amount Incurred
       Type of Compensation                                                                       For the Year
            and Recipient                            Method of Computation                   Ended December 31, 1998
<S> <C>

Reimbursement to CNL Fund Advisors,  Inc.     Operating  expenses  are  reimbursed     Operating expenses
and affiliates for operating expenses         at the  lower of cost or 90  percent     incurred  on behalf of  the
                                              of  the  prevailing  rate  at  which     Partnership: $64,521
                                              comparable  services could have been
                                              obtained  in  the  same   geographic     Accounting and
                                              area.   Affiliates  of  the  General     administrative services:
                                              Partners  from  time to  time  incur     $91,124
                                              certain   operating    expenses   on
                                              behalf of the  Partnership for which
                                              the   Partnership   reimburses   the
                                              affiliates without interest.

Annual   management   fee  to  CNL   Fund     One  percent  of the  sum  of  gross         $26,690
Advisors, Inc.                                revenues  (excluding  noncash  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 CNL Fund Advisors,  Inc. All or
                                              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 CNL Fund  Advisors,
                                              Inc. shall determine.


</TABLE>

<PAGE>
<TABLE>
<CAPTION>



                                                                                                 Amount Incurred
       Type of Compensation                                                                       For the Year
            and Recipient                            Method of Computation                   Ended December 31, 1998
<S> <C>
Deferred,    subordinated   real   estate     A   deferred,    subordinated   real         $ - 0 -
disposition   fee  payable  to  CNL  Fund     estate   disposition   fee,  payable
Advisors, Inc.                                upon    sale    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 CNL
                                              Fund  Advisors,  Inc.  provides  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         $ - 0 -
sub-ordinated  share of  Partnership  net     equal    to    five    percent    of
cash flow                                     Partnership   distributions  of  net
                                              cash flow,  subordinated  to certain
                                              minimum   returns  to  the   Limited
                                              Partners.

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

</TABLE>


<PAGE>
<TABLE>
<CAPTION>



                                                                                                 Amount Incurred
       Type of Compensation                                                                       For the Year
            and Recipient                            Method of Computation                   Ended December 31, 1998
<S> <C>
General  Partners'  share of  Partnership     Distributions  of net sales proceeds         $ - 0 -
net sales  proceeds  from a sale or sales     from   a   sale    or    sales    of
in liquidation of the Partnership             substantially     all     of     the
                                              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.

         As discussed  above in Item 8. Financial  Statements and  Supplementary
Data -- Note 11. Subsequent Events, the Registrant has entered into an Agreement
and Plan of  Merger,  dated  March  11,  1999,  with APF  pursuant  to which the
Registrant would be merged with and into a subsidiary of APF in exchange for the
issuance of APF Shares.  The APF Shares are expected to be listed for trading on
the New York Stock Exchange concurrently with the consummation of the Merger. If
the Merger is approved by Limited Partners holding units greater than 50% of the
outstanding  units of the  Registrant,  the General  Partners of the  Registrant
would receive certain  benefits.  For instance,  following the Merger,  James M.
Seneff, Jr. and Robert A. Bourne, the individual General Partners, will continue
to serve as directors of APF, with Mr. Seneff serving as Chairman and Mr. Bourne
serving as Vice Chairman. As APF directors, they may also be entitled to receive
stock options under any stock option plan adopted by APF.


</TABLE>

<PAGE>


                                     PART IV

Item 14.  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 Accountants

                  Balance Sheets at December 31, 1998 and 1997

                  Statements  of Income for the year ended  December  31,  1998,
                  1997, and 1996

                  Statements  of Partners'  Capital for the year ended  December
                  31, 1998, 1997, and 1996.

                  Statements of Cash Flows for the year ended December 31, 1998,
                  1997, and 1996

                  Notes to Financial Statements

         2.  Financial Statement Schedule

                  Schedule  III - Real Estate and  Accumulated  Depreciation  at
                  December 31, 1998

                  Notes  to  Schedule   III  -  Real   Estate  and   Accumulated
                  Depreciation at December 31, 1998

                  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 XVIII,  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 XVIII,  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 XVIII, 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 XVIII,  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.)



<PAGE>


               **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 XVIII,
                           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      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.)

               **10.4      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.)

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

               **10.6      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.)

               **10.7      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.)

               **10.8      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.)

               **10.9      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.)

               **10.10     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.)

               **10.11     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.)

               **10.12     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.)



<PAGE>


               **10.13     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.)

                27         Financial Data Schedule (Filed herewith.)

(b)      The  Registrant  filed no reports on Form 8-K during the period October
         1, 1998 through December 31, 1998.


**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 27th day of
March, 1999.

                                      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>
<CAPTION>

              Signature                                    Title                                   Date
<S> <C>
/s/ Robert A. Bourne                       Vice      President,       Secretary,              March 27, 1999
Robert A. Bourne                           Treasurer  and  Director   (Principal
                                           Financial  and Accounting  Officer)

/s/ James M. Seneff, Jr.                   President  and  Director   (Principal              March 27, 1999
James M. Seneff, Jr.                       Executive  Officer)
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


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

                                          SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                                             December 31, 1998
<S> <C>

                                                                                        Costs Capitalized   
                                                                                          Subsequent to     
                                                                 Initial Cost              Acquisition      
                                                        ---------------------------   --------------------- 
                                         Encum-                       Buildings and    Improve-    Carrying 
                                        brances             Land      Improvements      ments       Costs   
                                       ---------        ------------  -------------   -----------  -------- 
Properties the Partnership
  has Invested in Under
  Under Operating Leases:

     Arby's Restaurants:
       Muncie, Indiana                     -              $242,759             -            -         -     
       Schertz, Texas                      -               348,245       470,577            -         -     
       Plainfield, Indiana                 -               296,025       557,809            -         -     

     Boston Market Restaurants:
       Houston, Texas                      -               373,112       477,383            -         -     
       Long Beach, California              -               661,696             -      217,883         -     
       Inglewood, California (h)           -               327,924       535,518            -               

     Burger King Restaurants:
       Harvey, Illinois                    -               489,340       734,010            -               
       Chicago Ridge, Illinois             -               771,965             -      699,556         -     
       Lyons, Illinois                     -               887,767             -      597,381         -     

     Denny's Restaurants:
       Kentwood, Michigan                  -               287,732       626,865            -         -     
       Mesquite, Nevada                    -               373,077             -            -         -     
       Pensacola, Florida                  -               305,509       670,990            -         -     

     Fazoli's Restaurant:
       Warner Robins, Georgia              -               300,481             -      421,898         -     

     Golden Corral Family
       Steakhouse Restaurants:
           Orange Park, Florida            -               711,838     1,162,406            -         -     
           Aiken, South Carolina (g)       -               508,790             -      862,570         -     
           Weatherford, Texas (g)          -               345,926             -      691,222         -     
           El Cajon, California            -               974,793             -            -         -     

     Jack in the Box Restaurants:
       Dinuba, California                  -               324,970             -      509,982         -     
       LaPorte, Texas                      -               355,929             -      560,485         -     
       El Dorado, California               -               617,416             -      548,187         -     

     Popeye's Famous Fried
       Chicken Restaurant:
           Warner Robins, Georgia          -               260,513             -      330,100         -     

     Wendy's Old Fashioned
       Hamburgers Restaurants:
           Knoxville, Tennessee            -               332,003             -      489,610         -     
           Livingston, Tennessee           -               261,703             -            -         -     
                                                       -----------  ------------  -----------  --------  
 
                                                       $10,359,513    $5,235,558   $5,928,874         -   
                                                      ============  ============  ===========  ========  


Properties the Partnership has
  Invested in Under Direct
  Financing Leases:

     Arby's Restaurant:
       Muncie, Indiana                     -                     -      $629,847            -         -     

     Denny's Restaurant:
       Mesquite, Nevada                    -                     -             -      857,390         -     

     Golden Corral Family
       Steakhouse Restaurant:
           El Cajon, California            -                     -             -    1,119,438         -     

     Wendy's Old Fashioned
       Hamburgers Restaurant:
           Livingston, Tennessee           -                     -             -      455,575         -     
                                                       ------------  -----------  -----------  -------- 

                                                                 -      $629,847   $2,432,403         -     
                                                       ============  ===========  ===========  ========

Property in Which the Partner-
  ship has a 19.56% Interest
  as Tenants-in-Common and
  has Invested in Under an
  Operating Lease:

    Boston Market Restaurant:
      Fayetteville, North Carolina         -              $377,800      $587,700            -         -     
                                                      ============   ===========  ===========  ========

Property in Which the Partner-
  ship has a 27.42% Interest
  as Tenants-in-Common and
  has Invested in Under an
  Operating Lease:

    Black-eyed Pea Restaurant:
      Corpus Christi, Texas                -              $715,052      $726,004            -         -     
                                                      ============   ===========  ===========  ======== 

Property in Which the Partner-
  ship has a 36.91% Interest
  as Tenants-in-Common and
  has Invested in Under an
  Operating Lease:

    Burger King Restaurant:
      Akron, Ohio                          -              $355,594      $517,030            -         -     
                                                      ============  ============  ===========  ========


Property of Joint Venture in Which
  the Partnership has a 21% Interest
  and has Invested in Under an
  Operating Lease:

    Jack in the Box Restaurant:
      Mansfield, Texas                     -              $297,295      $482,914            -         -     
                                                      ============  ============  ===========  ========

Property of Joint Venture in Which
  the Partnership has a 60.06% Interest
  and has Invested in Under an
  Operating Lease:

    Taco Bell Restaurant:
      Kingston, Tennessee                  -              $189,452      $328,444            -         -     
                                                      ============  ============  ===========  ========





          Gross Amount at Which                                                  Life on Which   
         Carried at Close of Period (b)                                         Depreciation in          
 ----------------------------------------                 Date                   Latest Income                    
               Buildings and               Accumulated   of Con-     Date         Statement is     
    Land       Improvements    Total      Depreciation  struction  Acquired         Computed       
 ------------  ------------ ------------  -----------   ---------  --------       ------------     
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
 $242,759            (d)     $242,759           (e)        1995     03/96            (e)             
  348,245       470,577       818,822       39,730         1996     06/96            (c)             
  296,025       557,809       853,834       40,651         1996     10/96            (c)             
                                                                                                
                                                                                                
  373,112       477,383       850,495       40,305         1996     06/96            (c)             
  661,696       217,883       879,579       15,062         1996     12/96            (c)             
  327,924       535,518       863,442       10,270         1996     06/98            (c)             
                                                                                                
                                                                                                
  489,340       734,010     1,223,350       69,027         1996     03/96            (c)             
  771,965       699,556     1,471,521       61,523         1996     03/96            (c)             
  887,767       597,381     1,485,148       32,838         1997     11/96            (c)             
                                                                                                
                                                                                                
  287,732       626,865       914,597       58,207         1980     03/96            (c)             
  373,077            (d)      373,077           (e)        1996     12/95            (e)             
  305,509       670,990       976,499       53,756         1996     08/96            (c)             
                                                                                                
                                                                                                
  300,481       421,898       722,379       30,361         1996     08/96            (c)             
                                                                                                
                                                                                                
                                                                                                
  711,838     1,162,406     1,874,244      109,420         1996     03/96            (c)             
  508,790       862,570     1,371,360       73,478         1996     04/96            (c)             
  345,926       691,222     1,037,148       53,696         1996     03/96            (c)             
  974,793            (d)      974,793           (e)        1997     12/96            (e)             
                                                                                                
                                                                                                
  324,970       509,982       834,952       39,925         1996     05/96            (c)             
  355,929       560,485       916,414       42,499         1996     07/96            (c)             
  617,416       548,187     1,165,603       41,365         1996     07/96            (c)             
                                                                                                
                                                                                                
                                                                                                
  260,513       330,100       590,613       24,177         1996     08/96            (c)             
                                                                                                
                                                                                                
                                                                                                
  332,003       489,610       821,613       39,527         1996     05/96            (c)             
  261,703            (d)      261,703           (e)        1996     06/96            (e)             
---------    ------------  ------------  -----------                                              
                                                                                                
$10,359,513   $11,164,432   $21,523,945     $875,817                                              
===========  ============  ============  ===========                                              
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
        -            (d)           (d)          (e)        1995     03/96            (e)             
                                                                                                
                                                                                                
        -            (d)           (d)          (e)        1996     12/95            (e)             
                                                                                                
                                                                                                
                                                                                                
        -            (d)           (d)          (e)        1997     12/96            (e)             
                                                                                                
                                                                                                
                                                                                                
        -            (d)           (d)          (e)        1996     06/96            (e)             
---------                                                                                       
                                                                                                
        -                                                                                       
=========                                                                                       
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
 $377,800      $587,700      $965,500      $43,948         1996     10/96            (c)             
=========   ============  ============  ===========                                              
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
 $715,052      $726,004    $1,441,056      $46,648         1992     01/97            (c)             
=========   ============  ============  ===========                                              
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
 $355,594      $517,030      $872,624      $33,222         1970     01/97            (c)             
=========   ============  ============  ===========                                              
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
 $297,295      $482,914      $780,209      $28,963         1997     02/97            (c)             
=========   ============  ============  ===========                                              
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
 $189,452      $328,444      $517,896      $11,920         1997     09/97            (c)             
=========   ============  ============  ===========                                              
                                                                                                
                                                                                                
</TABLE>



<PAGE>







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

        NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 1998



(a)      Transactions in real estate and accumulated  depreciation  during 1998,
         1997 and 1996 are summarized as follows:
<TABLE>
<CAPTION>

                                                                                              Accumulated
                                                                              Cost           Depreciation
                                                                         ----------------    ---------------
<S> <C>
                Properties the Partnership has Invested
                  in Under Operating Leases:

                     Balance, December 31, 1995                              $   402,244           $    --
                     Acquisitions                                             21,138,783                --
                     Depreciation expense                                             --           176,995
                                                                         ----------------    ---------------

                     Balance, December 31, 1996                               21,541,027           176,995
                     Acquisitions                                                341,810                --
                     Depreciation expense                                             --           376,973
                                                                         ----------------    ---------------

                     Balance, December 31, 1997                               21,882,837           553,968
                     Acquisitions                                                499,431                --
                     Dispositions                                               (858,323 )         (36,214  )
                     Depreciation expense                                             --           358,063
                                                                         ----------------    ---------------

                     Balance, December 31, 1998                            $  21,523,945        $  875,817
                                                                         ================    ===============

                Property  in Which  the  Partnership
                  has a 19.56%  Interest  as
                  Tenants-in-Common  and has  Invested
                  in  Under  an  Operating lease:

                     Balance, December 31, 1995                                 $     --           $    --
                     Acquisition                                                 965,500                --
                     Depreciation expense                                             --             4,768
                                                                         ----------------    ---------------

                     Balance, December 31, 1996                                  965,500             4,768
                     Acquisitions                                                     --                --
                     Depreciation expense                                             --            19,590
                                                                         ----------------    ---------------

                     Balance, December 31, 1997                                  965,500            24,358
                     Acquisitions                                                     --                --
                     Depreciation expense                                             --            19,590
                                                                         ----------------    ---------------

                     Balance, December 31, 1998                              $   965,500        $   43,948
                                                                         ================    ===============

</TABLE>



<PAGE>


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

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

                                December 31, 1998
<TABLE>
<CAPTION>

                                                                                                Accumulated
                                                                               Cost             Depreciation
                                                                          ---------------       --------------
<S> <C>
                    Property in Which the  Partnership
                      has a 27.42% Interest as
                      Tenants-in-Common  and has
                      Invested in Under an Operating
                      Lease:

                         Balance, December 31, 1996                             $     --            $     --
                         Acquisition                                           1,441,056                  --
                         Depreciation expense                                         --              22,448
                                                                         ----------------      ---------------

                         Balance, December 31, 1997                            1,441,056              22,448
                         Depreciation expense                                         --              24,200
                                                                         ----------------      ---------------

                         Balance, December 31, 1998                         $  1,441,056          $   46,648
                                                                         ================      ===============

                    Property in Which the  Partnership
                      has a 36.91% Interest as
                      Tenants-in-Common  and has
                      Invested in Under an Operating
                      Lease:

                         Balance, December 31, 1996                               $     --             $    --
                         Acquisition                                               872,624                  --
                         Depreciation expense                                           --              15,988
                                                                          ---------------       --------------

                         Balance, December 31, 1997                                872,624              15,988
                         Depreciation expense                                           --              17,234
                                                                          ---------------       --------------

                         Balance, December 31, 1998                            $   872,624           $  33,222
                                                                          ===============       ==============

                    Property of Joint Venture in Which
                      the Partnership has a 21%
                      Interest and has Invested in
                      Under an Operating Lease:

                         Balance, December 31, 1996                               $     --             $    --
                         Acquisition                                               780,209                  --
                         Depreciation expense                                           --              12,866
                                                                          ---------------       --------------

                         Balance, December 31, 1997                                780,209              12,866
                         Depreciation expense                                           --              16,097
                                                                          ---------------       --------------

                         Balance, December 31, 1998                            $   780,209           $   28,963
                                                                          ===============       ==============
</TABLE>




<PAGE>


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

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

                                December 31, 1998
<TABLE>
<CAPTION>

                                                                                                Accumulated
                                                                               Cost             Depreciation
                                                                          ---------------       --------------
<S> <C>
                    Property of Joint  Venture  in Which
                      the  Partnership  has a
                      60.06%  Interest  and has  Invested
                      in Under an  Operating
                      Lease:

                         Balance, December 31, 1996                               $     --             $    --
                         Acquisition                                               512,925                  --
                         Depreciation expense                                           --                 983
                                                                          ---------------       --------------

                         Balance, December 31, 1997                                512,925                 983
                         Acquisitions                                                4,971                   --
                         Depreciation expense                                           --              10,937
                                                                          ---------------       --------------

                         Balance, December 31, 1998                            $   517,896           $  11,920
                                                                          ===============       ==============
</TABLE>

         (b)        As  of  December  31,  1998,   the  aggregate  cost  of  the
                    Properties  owned by the  Partnership  and the joint venture
                    for  federal  income  tax  purposes  was   $22,500,782   and
                    $6,671,518,  respectively.  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)        For financial reporting purposes,  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)       For financial reporting  purposes,  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, 1996,  the  Partnership
                    incurred  acquisition fees totalling  $1,093,639 paid to CNL
                    Fund Advisors, Inc. During the years ended December 31, 1997
                    and 1996, the Partnership  purchased land and buildings from
                    affiliates  of  the   Partnership  for  aggregate  costs  of
                    approximately  $718,932 and $1,667,100,  respectively.  Such
                    amounts are  included  in land and  buildings  on  operating
                    leases,   net   investment  in  direct   financing   leases,
                    investment  in joint  ventures  and other assets at December
                    31, 1998.

         (g)        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.

         (h)        This property was  exchanged for a Boston Market  previously
                    owned and located in Troy, Ohio, during 1998.


<PAGE>






                                                      EXHIBITS


<PAGE>







                                  EXHIBIT INDEX


Exhibit Number

    **3.1         Affidavit and Certificate of Limited Partnership of CNL Income
                  Fund XVIII,  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 XVIII, 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 XVIII,  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 XVIII, 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 XVIII, 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        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.)

    **10.4        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.)

    **10.5        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.)



<PAGE>


    **10.6        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.)

    **10.7        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.)

    **10.8        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.)

    **10.9        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.)

    **10.10       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.)

    **10.11       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.)

    **10.12       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.)

    **10.13       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.)

     27           Financial Data Schedule (Filed herewith.)


**previously filed