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, 2001

                                       OR

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

                        For the transition period from to

                         Commission file number 0-22485

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

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

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

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

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

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

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

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

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

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

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

                      DOCUMENTS INCORPORATED BY REFERENCE:
                                      None
<page>
                                     PART I

Item 1.  Business

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

         The  Partnership  was organized to acquire both newly  constructed  and
existing  restaurant  properties,  as well as properties upon which  restaurants
were to be  constructed  (the  "Properties"),  which  are  leased  primarily  to
operators of national and regional  fast-food,  family-style  and casual  dining
restaurant  chains (the  "Restaurant  Chains").  Net proceeds to the Partnership
from its  offering of Units,  after  deduction  of  organizational  and offering
expenses, totalled $26,400,000 and were used as of December 31, 1998, to acquire
29 Properties,  pay  acquisition  fees  totalling  $1,350,000 and to establish a
working capital reserve for Partnership purposes. The 29 Properties include four
Properties owned by joint ventures in which the Partnership is a co-venturer and
three   Properties   owned  with   affiliates   of  the   General   Partners  as
tenants-in-common.   During  1998,  the  Partnership   received  $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.
During  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.  In addition,  during 1999,  CNL/GC El
Cajon Joint Venture, in which the Partnership owned an 80 percent interest, sold
its Property to the tenant and the Partnership received a return of capital from
the net sales proceeds. In January 2000, the Partnership reinvested the majority
of the net sales proceeds  received from El Cajon Joint Venture in a Property in
Wilmette,   Illinois.  In  addition,  during  2000,  the  Partnership  sold  its
Properties in Warner Robins, Georgia and Long Beach, California. During the year
ended December 31, 2001, the Partnership  reinvested the net sales proceeds from
the 2000  sale of the  Property  in  Warner  Robins,  Georgia,  and Long  Beach,
California along with a portion of the net sales proceeds received from the 2001
sale of the  Property  in  Houston,  Texas,  and  entered  into a joint  venture
arrangement,  CNL VII & XVII  Lincoln  Joint  Venture,  with an affiliate of the
General  Partners  to  purchase  and hold one  property  in  Lincoln,  Nebraska,
indirectly through a joint venture in which the Partnership is a co-venturer. In
addition, during 2001, the Partnership sold its Properties in Kentwood, Missouri
and El Dorado,  California, and reinvested a portion of these net sales proceeds
in a Property  in Austin,  Texas,  and in a Property in  Waldorf,  Maryland,  as
tenants-in-common,  with affiliates of the General  Partners,  which are Florida
limited partnerships.  In addition,  during 2001, the Partnership distributed to
the limited partners, a portion of the net sales proceeds received from the sale
in Inglewood,  California and a portion of the net sales proceeds  received from
the sale of the Property in Houston, Texas.

         As a result of the above  transactions,  as of December 31,  2001,  the
Partnership owned 27 Properties. The 27 Properties include four Properties owned
by joint ventures in which the  Partnership is a co-venturer and five Properties
owned with affiliates as tenants-in-common. The Partnership generally leases the
Properties on a triple-net  basis with the lessees  responsible  for all repairs
and maintenance, property taxes, insurance and utilities.

         The  Partnership  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 15 to 20 years (the average being 18 years) and expire between 2011
and 2020. The majority of the leases are on a triple-net basis, with the lessees
responsible  for all repairs and  maintenance,  property  taxes,  insurance  and
utilities.  The leases of the Properties  provide for minimum base annual rental
payments (payable in monthly installments) ranging from approximately $57,300 to
$280,900. 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.  Lessees of 22 of the  Partnership's 27 Properties also have been
granted options to purchase  Properties at the Property's then fair market value
after a specified portion of the lease term has elapsed.  Fair market value will
be determined  through an appraisal by an independent  appraisal firm. Under the
terms of certain leases,  the option purchase price may equal the  Partnership's
original cost to purchase the Property  (including  acquisition  costs),  plus a
specified percentage from the date of the lease or a specified percentage of the
Partnership's purchase price, if that amount is greater than the Property's fair
market value at the time the purchase option is exercised.

         The leases 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  2001,  the  Partnership  reinvested  a portion of the net sales
proceeds it received from the sales of the Properties in Warner Robins, Georgia;
Long Beach,  California;  Houston,  Texas;  Kentwood,  Missouri;  and El Dorado,
California (as described above);  in a Property in Austin,  Texas; in a Property
in  Waldorf,  Maryland,  as  tenants-in-common  with  affiliates  of the General
Partners and in a Property in Lincoln,  Nebraska in a joint venture arrangement,
CNL VII & XVII Lincoln Joint Venture, with an affiliate of the General Partners.
The affiliates are limited  partnerships  organized  pursuant to the laws of the
state of Florida.  The lease terms for these  Properties are  substantially  the
same as the Partnership's other leases, as described above.

         In February 2002, a tenant,  Sybra,  Inc., filed for bankruptcy.  As of
March 15, 2002, the Partnership has continued receiving rental payments relating
to the Property in Zephyrhills,  Florida,  held with an affiliate of the General
Partners,  as  tenants-in-common.  While the tenant has not rejected or affirmed
the lease, there can be no assurance that it will not be rejected in the future.
The lost revenues resulting from the possible rejection of this lease could have
an adverse effect on the results of operations of the Partnership.

Major Tenants

         During  2001,   four  lessees  of  the   Partnership,   Golden   Corral
Corporation,  National  Restaurant  Enterprises,  Inc., Jack in the Box Inc. and
Jack in the Box Eastern  Division,  L.P.  (which are  affiliated  entities under
common  control)  (hereinafter  referred  as  "Jack in the Box  Inc."),  and RTM
Indianapolis,  Inc. and RTM Southwest Texas, Inc. (which are affiliated entities
under common control)  (hereinafter  referred as "RTM, Inc."),  each contributed
more than 10% of the Partnership's total rental and earned income, including the
Partnership's  share of  rental  and  earned  income  from  Properties  owned by
unconsolidated  joint  ventures  and  Properties  owned with  affiliates  of the
General Partners as  tenants-in-common.  As of December 31, 2001,  Golden Corral
Corporation was the lessee under leases relating to four  restaurants,  and Jack
in the Box Inc., National Restaurant  Enterprises,  Inc. and RTM, Inc. were each
the lessee under leases relating to three  restaurants.  It is anticipated  that
based on the minimum rental payments required by the leases,  these four lessees
each will  continue to  contribute  more than ten  percent of the  Partnership's
total rental and earned income in 2002.  In addition,  four  Restaurant  Chains,
Golden Corral Family Steakhouse Restaurants, ("Golden Corral"), Jack in the Box,
Burger King, and Arby's,  each accounted for more than 10% of the  Partnership's
total rental and earned income during 2001 (including the Partnership's share of
rental and earned income from Properties owned by unconsolidated  joint ventures
and   Properties   owned   with   affiliates   of  the   General   Partners   as
tenants-in-common).  In  2002,  it  is  anticipated  that  each  of  these  four
Restaurant Chains will continue to contribute more than 10% of the Partnership's
rental and earned income to which the Partnership is entitled under the terms of
the  leases.  Any failure of these  lessees or  Restaurant  Chains  could have a
material  adverse affect on the  Partnership's  income if the Partnership is not
able to re-lease or sell the Properties in a timely  manner.  As of December 31,
2001, Golden Corral  Corporation  leased  Properties with an aggregate  carrying
value in excess of 20 percent of the total assets of the Partnership.

Joint Venture and Tenancy in Common Arrangements

         The Partnership  has entered into the following  separate joint venture
arrangements,  each to  purchase  and hold one  Property:  CNL  Mansfield  Joint
Venture with CNL Income Fund VII,  Ltd., and CNL Kingston Joint Venture with CNL
Income Fund XIV,  Ltd.,  Ocean Shores Joint Venture with CNL Income Fund X, Ltd.
In  addition,  in April  2001,  the  Partnership  entered  into a joint  venture
arrangement,  CNL VII & XVII Lincoln  Joint  Venture,  with CNL Income Fund VII,
Ltd.,  an affiliate of the General  Partners to purchase and hold one  Property.
Each of the CNL Income Funds is an  affiliate  of the General  Partners and is a
limited partnership organized pursuant to the laws of the state of Florida.

         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 owns a 21% interest in CNL Mansfield Joint Venture,  a
60.06% interest in CNL Kingston Joint Venture, a 30.94% interest in Ocean Shores
Joint Venture,  and an 86% interest in CNL VII & XVII Lincoln Joint Venture. The
Partnership and its joint venture partners are also jointly and severally liable
for all  debts,  obligations  and  other  liabilities  of the  respective  joint
venture.

         CNL  Mansfield  Joint  Venture,  CNL Kingston  Joint  Venture and Ocean
Shores  Joint  Venture  each have an initial term of 20 years and CNL VII & XVII
Lincoln Joint Venture has an initial term of 30 years and,  after the expiration
of the initial term, the joint ventures  continue in existence from year to year
unless  terminated at the option of either of the joint  venturer or by an event
of  dissolution.  Events of dissolution  include the  bankruptcy,  insolvency or
termination of either of the joint venture 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  shares  management  control equally with affiliates of
the  General  Partners  for each of these  joint  ventures.  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  Mansfield  Joint  Venture,  CNL
Kingston Joint Venture,  Ocean Shores Joint Venture,  and CNL VII & XVII Lincoln
Joint Venture is distributed 21%, 60.06%, 30.94% and 86%,  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
entered into an agreement to hold a Property in Fayetteville, North Carolina, as
tenants-in-common  with CNL Income Fund XVI,  Ltd.,  an affiliate of the General
Partners;  an  agreement  to  hold a  Property  in  Corpus  Christi,  Texas,  as
tenants-in-common,  with CNL Income Fund XI,  Ltd.,  an affiliate of the General
Partners;  an agreement to hold a Property in Akron, Ohio, as tenants-in-common,
with CNL Income Fund XIII,  Ltd., an affiliate of the General  Partners,  and an
agreement to hold a Property in Zephyrhills, Florida, as tenants-in-common, with
CNL Income Fund IV, Ltd., an affiliate of the General Partners.  In addition, in
July 2001,  the  Partnership  entered  into an  agreement  to hold a Property in
Waldorf,  Maryland, as tenants-in-common,  with CNL Income Fund VI, Ltd. and CNL
Income  Fund  IX,  Ltd.  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-tenant's  percentage interest.
The  Partnership  owns a 19.56%,  27.42%,  36.91%,  24% and 25%  interest in the
Properties in Fayetteville,  North Carolina; Corpus Christi, Texas; Akron, Ohio;
Zephryhills, Florida; and Waldorf, Maryland, respectively.

         Each of the affiliates is a limited  partnership  organized pursuant to
the laws of the State of Florida. The tenancy in common agreement restricts each
co-tenant's ability to sell, transfer,  or assign its interest in the tenancy in
common's Property without first offering it for sale to the remaining co-tenant.

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

Certain Management Services

         CNL APF Partners,  LP, 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 APF  Partners,  LP (the  "Advisor") 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.  The Advisor also assists the General  Partners in  negotiating  the
leases.  For these  services,  the  Partnership has agreed to pay the Advisor an
annual fee of one percent of the sum of gross rental  revenues  from  Properties
wholly owned by the Partnership plus the Partnership's  allocable share of gross
revenues of joint ventures in which the Partnership is a co-venturer, but not in
excess of competitive fees for comparable services.

         During 2000,  CNL Fund Advisors,  Inc.  assigned its rights in, and its
obligations  under,  the management  agreement  with the  Partnership to CNL APF
Partners,  LP. All of the terms and conditions of the management,  including the
payment of fees, as described, remain unchanged.

         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 APF, the parent  company of the
Advisor, perform certain services for the Partnership.  In addition, the General
Partners have  available to them the resources and expertise of the officers and
employees of CNL Financial Group,  Inc., a diversified real estate company,  and
its affiliates, who may also perform certain services for the Partnership.


Item 2.  Properties

         As of December 31, 2001, the Partnership owned 27 Properties. Of the 27
Properties,  18 are  owned by the  Partnership  in fee  simple,  four are  owned
through joint venture  arrangements and five are owned through tenancy in common
arrangements.  See Item 1.  Business  - Joint  Venture  and  Tenancy  in  Common
Arrangements.  The Partnership is not permitted to encumber its Properties under
the terms of its  partnership  agreement.  Reference  is made to the Schedule of
Real Estate and  Accumulated  Depreciation  for a listing of the  Properties and
their  respective  costs,  including  acquisition  fees and certain  acquisition
expenses.


Description of Properties

         Land. The Partnership's  Property sites range from approximately 21,300
to 115,100  square  feet  depending  upon  building  size and local  demographic
factors.  Sites  purchased  by  the  Partnership  are  in  locations  zoned  for
commercial use which have been reviewed for traffic patterns and volume.

         The following table lists the Properties owned by the Partnership as of
December 31, 2000 by state. More detailed information  regarding the location of
the  Properties  is  contained  in the  Schedule of Real Estate and  Accumulated
Depreciation for the year ended December 31, 2000.

               State                               Number of Properties

               California                                    1
               Florida                                       3
               Georgia                                       1
               Illinois                                      4
               Indiana                                       2
               Maryland                                      1
               North Carolina                                1
               Nebraska                                      1
               Nevada                                        1
               Ohio                                          1
               South Carolina                                1
               Tennessee                                     3
               Texas                                         6
               Washington                                    1
                                                       --------------
               TOTAL PROPERTIES                             27
                                                       ==============

         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. As of December 31, 2001, the Partnership had no plans for renovation
of  the  Properties.   Depreciation   expense  is  computed  for  buildings  and
improvements using the straight line method using a depreciable life of 40 years
for federal income tax purposes.

         As of December 31, 2001, the aggregate cost of the Properties  owned by
the Partnership and joint ventures  (including  Properties owned through tenancy
in common  arrangements)  for federal  income tax purposes was  $19,984,630  and
$10,459,655, respectively.


         The following table lists the Properties owned by the Partnership as of
December 31, 2001 by Restaurant Chain.

                Restaurant Chain                  Number of Properties

                Arby's                                      4
                Bakers Square                               1
                Bennigan's                                  1
                Black-eyed Pea                              1
                Boston Market                               1
                Burger King                                 5
                Denny's                                     2
                Fazoli's                                    1
                Golden Corral                               4
                Jack in the Box                             3
                Taco Bell                                   1
                Taco Cabana                                 1
                Wendy's                                     2
                                                      --------------
                TOTAL PROPERTIES                           27
                                                      ==============

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

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

         Leases.  The Partnership leases the Properties to operators of selected
national and  regional  fast-food,  family-style  and casual  dining  restaurant
chains. The leases are generally on a long-term "triple net" basis, meaning that
the tenant is responsible for repairs,  maintenance,  property taxes,  utilities
and  insurance.  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. The terms of
the leases of the Properties  owned by the  Partnership are described in Item 1.
Business - Leases.

         As of December 31, 2001, 2000, 1999, 1998, and 1997 the Properties were
96%,  92%,  93%,  100%,  and 100%  occupied,  respectively.  The  following is a
schedule of the average rent per Property for the years ended December 31:
<TABLE>
<CAPTION>

                                       2001              2000              1999             1998              1997
                                   --------------    -------------     -------------    -------------     --------------

 <c>
Rental Income(1)(2)                  $ 2,357,917      $ 2,353,394       $ 2,667,611      $ 2,983,830        $ 2,762,605
Properties(2)                                 26               26                29               28                 28
Average Rent per Property              $  90,689        $  90,515         $  91,987        $ 106,565          $  98,664
</TABLE>

(1)      Rental income  includes the  Partnership's  share of rental income from
         the  Properties  owned  through  joint  venture  arrangements  and  the
         Properties owned with affiliates as tenants-in-common.  Rental revenues
         have  been  adjusted,  as  applicable,  for any  amounts  for which the
         Partnership has established a provision for doubtful accounts.

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

         The following is a schedule of lease expirations for leases in place as
of December 31, 2001 for each year for the next ten years and thereafter.
<TABLE>
<CAPTION>

                                                                                     Percentage of
             Expiration Year          Number               Annual Rental             Gross Annual
                                     of Leases                Revenues               Rental Income
             -----------------    ----------------        -----------------    --------------------------

 <c>
              2002                             --                 $     --                      --
              2003                             --                       --                      --
              2004                             --                       --                      --
              2005                             --                       --                      --
              2006                             --                       --                      --
              2007                             --                       --                      --
              2008                             --                       --                      --
              2009                             --                       --                      --
              2010                             --                       --                      --
              2011                              4                  458,331                  18.57%
              Thereafter                       22                2,009,533                  81.43%
                                        ----------        -----------------           -------------
              Total (1)                        26             $  2,467,864                 100.00%
                                        ==========        =================           =============
</TABLE>

         (1) Excludes one Property which was vacant at December 31, 2001.

         Leases  with Major  Tenants.  The terms of each of the leases  with the
Partnership's  major  tenants as of December  31,  2001 (see Item 1.  Business -
Major  Tenants),  are  substantially  the  same as  those  described  in Item 1.
Business - Leases.

         Golden Corral  Corporation leases four Golden Corral  restaurants.  The
initial  term of each lease is 15 years (three  leases  expiring in 2011 and one
lease in  2015)  and the  average  minimum  base  annual  rent is  approximately
$156,000 (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  $140,400
(ranging from approximately $123,200 to $153,600).

         Jack in the Box,  Inc.  leases three 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  $88,300  (ranging  from
approximately $80,100 to $96,300).

         RTM,  Inc.  leases three Arby's  Restaurants.  The initial term of each
lease is 20 years (expiring in 2016) and the average minimum base annual rent is
approximately $85,700 (ranging from approximately $82,700 to $88,200).

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 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

         (a) As of March 15,  2002,  there were  1,609  holders of record of the
Units.  There  is no  public  trading  market  for  the  Units,  and  it is  not
anticipated  that a public  market  for the Units  will  develop.  During  2001,
Limited  Partners  who wished to sell their Units may have offered the Units for
sale pursuant to the Partnership's  distribution reinvestment plan (the "Plan"),
and  Limited  Partners  who wished to have their  distributions  used to acquire
additional  Units (to the extent Units were  available for  purchase),  may have
done so pursuant to such Plan.  The General  Partners have the right to prohibit
transfers of Units. From inception through December 31, 2001, the price paid for
any Unit  transferred  pursuant to the Plan ranged from $9.14 to $9.50 per Unit.
The price  paid for any Unit  transferred  other than  pursuant  to the Plan was
subject to negotiation  by the purchaser and the selling  Limited  Partner.  The
Partnership will not redeem or repurchase Units.

         The following table reflects,  for each calendar quarter, the high, low
and average sales prices for transfers of Units during 2001 and 2000, other than
pursuant to the Plan, net of commissions.
<TABLE>
<CAPTION>

                                                2001                                      2000
                                --------------------------------------    -------------------------------------
                                  High         Low           Average       High          Low          Average
                                ---------    ---------      ----------    --------     ---------     ----------

 <c>
        First Quarter             (2)          (2)             (2)          $7.63         $7.63         $ 7.63
        Second Quarter             $6.70       $ 6.50          $ 6.57       $8.50         $6.66         $ 8.13
        Third Quarter               6.61         6.42            6.50       $7.63         $7.00         $ 7.32
        Fourth Quarter              9.57         6.10            7.84       $7.03         $6.50         $ 6.83
</TABLE>

(1)      A total of 14,880 and 12,000 Units were transferred other than pursuant
         to  the  Plan  for  the  years  ended   December  31,  2001  and  2000,
         respectively.

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

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

         For each of the years ended December 31, 2001 and 2000, the Partnership
declared cash distributions of $2,400,000 to the Limited Partners. Distributions
of $600,000  were  declared at the close of each of the  Partnership's  calendar
quarters  during 2001 and 2000 to the Limited  Partners.  These amounts  include
monthly  distributions  made in arrears  for the  Limited  Partners  electing to
receive such distributions on this basis. No amounts distributed to partners for
the years  ended  December  31, 2001 and 2000,  are  required to be or have been
treated by the  Partnership  as a return of capital for purposes of  calculating
the  Limited  Partners'  return  on their  adjusted  capital  contributions.  No
distributions have been made to the General Partners to date.

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

(b)      Not applicable.



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


                               Year Ended        Year Ended        Year Ended       Year Ended        Year Ended
                              December 31,      December 31,      December 31,     December 31,      December 31,
                                  2001              2000              1999             1998              1997
                             ---------------- ----------------- ----------------- ---------------- -----------------

 <c>
 Revenues (1)                   $  1,885,375      $  2,471,879      $  2,843,434     $  2,946,048      $  2,772,714
 Net income (2)                      969,196           673,138         1,839,269        2,394,158         2,203,557
 Cash distributions
     declared                      2,400,000         2,400,000         2,400,000        2,400,000         2,287,500
 Net income per Unit
     (2)(3)                             0.32              0.22              0.61             0.80              0.73
 Cash distributions
     declared per Unit
     (3)                                0.80              0.80              0.80             0.80              0.76

                                  2001              2000              1999             1998              1997
                             ---------------- ----------------- ----------------- ---------------- -----------------
 At December 31:
     Total assets              $  23,194,348     $  24,675,610     $  26,561,963    $  27,365,705     $  27,524,148
     Partners' capital            22,511,964        23,942,768        25,669,630       26,230,361        26,236,203
</TABLE>

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

(2)      Net  income  for the  years  ended  December  31,  2001,  2000 and 1999
         includes  $534,135,   $1,107,919,  and  $232,140  from  provisions  for
         write-down of assets,  respectively,  and for the years ended  December
         31, 2001 and 2000,  it includes  $310,979 and $17,447 from gain on sale
         of assets,  respectively.  Net income for the year ended  December  31,
         1999 includes $82,914 from loss on dissolution of joint venture.

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


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, 2001,  the  Partnership  owned 27
Properties,  either  directly  or  through  joint  venture  or tenancy in common
arrangements.

Capital Resources

         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  $1,784,443,  $1,846,222,  and  $2,450,018  for the years  ended
December  31,  2001,  2000 and 1999,  respectively.  The  decrease  in cash from
operations  during  2001 and 2000,  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.

         Other  sources and uses of capital  included the  following  during the
years ended December 31, 2001, 2000 and 1999.

         In  December  1999,  CNL/GC  El  Cajon  Joint  Venture,  in  which  the
Partnership  owned an 80 percent  interest,  sold its Property to its tenant for
$2,094,231.  Due to the fact that the joint venture had recorded  accrued rental
income,  the joint  venture  wrote off  $172,496  in  accrued  rental  income in
connection with the sale. The accrued rental income was the  accumulated  amount
of non-cash  accounting  adjustments  previously  recorded in order to recognize
future scheduled rent increases as income evenly over the term of the lease. The
write-off represented the difference between the carrying value of the Property,
including the  accumulated  accrued rental  income,  and the estimated net sales
proceeds from the anticipated sale of the Property.  In addition, as a result of
the sale of the Property, the joint venture was dissolved in accordance with the
joint venture  agreement.  As a result, the Partnership  received  approximately
$1,675,400, representing its prorata share of the net sales proceeds received by
the joint venture and recorded a loss on  dissolution  of $82,914 as of December
31, 1999,  which  represented  the balance of unamortized  costs recorded by the
joint venture.  In January 2000, the Partnership  reinvested the majority of the
return of  capital in a Baker's  Square  Property  in  Wilmette,  Illinois.  The
Partnership acquired the Property from an affiliate of the General Partners. The
affiliate had purchased and  temporarily  held title to the Property in order to
facilitate  the  acquisition  of the Property by the  Partnership.  The purchase
price paid by the Partnership represented the costs incurred by the affiliate to
acquire the Property,  including  closing  costs.  The  Partnership  distributed
amounts  sufficient  to enable the  Limited  Partners  to pay  federal and state
income taxes, if any (at a level  reasonably  assumed by the General  Partners),
resulting from the sale.

         In September 2000, the Partnership  sold its Popeyes Property in Warner
Robins,  Georgia to a third party for a total of $609,861 and received net sales
proceeds  of  approximately  $607,400,  resulting  in a  gain  of  $17,447.  The
Partnership distributed amounts sufficient to enable the Limited Partners to pay
federal and state income  taxes,  if any (at a level  reasonably  assumed by the
General Partners), resulting from the sale.

         In addition,  in October 2000, the  Partnership  sold its Boston Market
Property in Long Beach, California, for $533,500 and received net sales proceeds
of approximately $530,000. Due to the fact that in 2000 the Partnership recorded
a provision for write-down of assets for loss of $353,622 for this Property,  no
gain or loss was  recognized  in 2000,  relating  to the sale.  The  Partnership
distributed amounts sufficient to enable the Limited Partners to pay federal and
state  income  taxes,  if any  (at a level  reasonably  assumed  by the  General
Partners), resulting from the sale.

         In January 2001, the Partnership sold its Property in Houston, Texas to
a third party for  $812,696 and  received  net sales  proceeds of  approximately
$782,700,  resulting  in a gain of $4,284.  The  Partnership  used the net sales
proceeds to acquire an interest in CNL VII and XVII Lincoln  Joint  Venture,  as
described  below,  and to  make  distributions  to  the  limited  partners.  The
Partnership distributed amounts sufficient to enable the limited partners to pay
federal and state income  taxes,  if any (at a level  reasonably  assumed by the
General Partners), resulting from the sale.

         In April 2001, the  Partnership  reinvested the net sales proceeds from
the sales of the Properties in Warner Robins,  Georgia; Long Beach,  California,
and  Houston  Texas,  as  described  above,  and  entered  into a joint  venture
arrangement,  CNL VII & XVII Lincoln  Joint  Venture,  with CNL Income Fund VII,
Ltd., a Florida limited partnership and an affiliate of the General Partners, to
hold one Property.  The joint venture  acquired this Property from CNL BB Corp.,
an affiliate of the General  Partners,  who had purchased and  temporarily  held
title to the Property in order to facilitate the  acquisition of the Property by
the joint venture. The Partnership contributed  approximately  $1,496,700 to the
joint venture. As of December 31, 2001, the Partnership owned an 86% interest in
the profits and losses of the joint venture.

         In June 2001, the Partnership sold the Property in Kentwood,  Michigan,
received  net sales  proceeds of  approximately  $681,200 and recorded a loss of
$38,877.  In July  2001,  the  Partnership  used a  portion  of these  net sales
proceeds  to  acquire  an  interest  in a  Property  in  Waldorf,  Maryland,  as
tenants-in-common  with CNL Income Fund VI, Ltd.  and CNL Income Fund IX,  Ltd.,
each of which is a Florida  limited  partnership and an affiliate of the General
Partners.  As of December 31, 2001, the  Partnership  contributed  approximately
$570,100  for a 25%  interest  in the profits  and losses of the  Property.  The
Partnership  intends to reinvest the remainder portion of the net sales proceeds
in an additional Property.

         In September  2001,  the  Partnership  sold the Property in  Inglewood,
California  to a third party for $300,000  and  received  net sales  proceeds of
approximately  $298,300.  Due  to the  fact  that  during  second  quarter,  the
Partnership  had  recorded a  provision  for  write-down  of this  Property,  no
additional gain or loss was recognized in September 2001 relating to the sale of
the Property. The Partnership distributed a portion of the net sales proceeds to
the Limited  Partners and intends to reinvest the remaining sales proceeds in an
additional Property.

         In September 2001, the Partnership also sold its Property in El Dorado,
California to a third party for  $1,553,500  and received net sales  proceeds of
approximately $1,510,500, resulting in a gain of $345,572. In December 2001, the
Partnership reinvested the majority of net sales proceeds received in a Property
in Austin, Texas. The Partnership acquired the Property from an affiliate of the
General Partners.  The affiliate had purchased and temporarily held title to the
Property  in  order  to  facilitate  the  acquisition  of  the  Property  by the
Partnership.  The  purchase  price  paid  by the  Partnership  of  approximately
$1,216,600  represented  the costs  incurred  by the  affiliate  to acquire  the
Property,  including  closing  costs.  The  General  Partners  believe  that the
transaction,  or a portion thereof, relating to the sale of the Property and the
reinvestment of the proceeds qualified as a like-kind  exchange  transaction for
federal income tax purposes. The Partnership distributed the remaining net sales
proceeds to the Limited Partners. The Partnership distributed amounts sufficient
to enable the Limited Partners to pay federal and state income taxes, if any (at
a level reasonably assumed by the general partners), resulting from the sale.

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

         Currently,  rental income from the  Partnership's  Properties  and cash
reserves  are  invested in money  market  accounts or other  short-term,  highly
liquid  investments such as demand deposit accounts at commercial  banks,  money
market  accounts and  certificates  of deposit with less than a 90-day  maturity
date, pending the Partnership's use of such funds to pay Partnership expenses or
to make  distributions  to partners.  At December 31, 2001, the  Partnership had
$673,924  invested in such  short-term  investments as compared to $1,597,502 at
December 31, 2000. The decrease in the amount invested in short-term investments
at  December  31,  2001,   as  compared  to  December  31,  2000,  is  primarily
attributable to the Partnership reinvesting the net sales proceeds from the 2000
sale of the Properties in Warner Robins, Georgia and Long Beach, California,  in
a Property acquired in a joint venture arrangement, CNL VII & XVII Lincoln Joint
Venture,  with  affiliates of the General  Partners,  as described  above. As of
December 31, 2001, the average interest rate earned by the Partnership on rental
income   deposited  in  demand   deposit   accounts  at  commercial   banks  was
approximately  2.7% annually.  The funds remaining at December 31, 2001, will be
used to pay distributions and other liabilities of the Partnership.

         In February 2002, a tenant,  Sybra,  Inc., filed for bankruptcy.  As of
March 15, 2002, the Partnership has continued receiving rental payments relating
to the Property in Zephyrhills,  Florida,  held with an affiliate of the General
Partners,  as  tenants-in-common.  While the tenant has not rejected or affirmed
the lease, there can be no assurance that it will not be rejected in the future.
The lost revenues resulting from the possible rejection of this lease could have
an adverse effect on the results of operations of the Partnership.

         In March  2002,  the  Partnership  entered  into an  agreement  with an
unrelated  third party to sell the  Denny's  Property in  Mesquite,  Nevada.  At
December 31, 2001,  the  Partnership  established a provision for  write-down of
assets related to the anticipated  sale of this Property.  As of March 15, 2002,
the sale had not occurred.

Short-Term Liquidity

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

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

         The 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.

         The Partnership  generally  distributes cash from operations  remaining
after the payment of the operating  expenses of the  Partnership,  to the extent
that  the  General  Partners   determine  that  such  funds  are  available  for
distribution.  Based on current  cash from  operations,  and for the years ended
December  31,  2001 and  2000,  anticipated  future  cash from  operations,  the
Partnership  declared  distributions  to the Limited  Partners of $2,400,000 for
each of the years  ended  December  31,  2001,  2000 and 1999.  This  represents
distributions  of $0.80 per Unit for each of the years ended  December 31, 2001,
2000 and 1999. No distributions  were made to the General Partners for the years
ended  December 31, 2001,  2000 and 1999. No amounts  distributed to the Limited
Partners for the years ended December 31, 2001, 2000 and 1999 are required to be
or have been treated by the  Partnership  as a return of capital for purposes of
calculating   the   Limited   Partners'   return  on  their   adjusted   capital
contributions. The Partnership intends to continue to make distributions of cash
available for distribution to Limited Partners on a quarterly basis.

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

         As of December  31, 2001 and 2000,  the  Partnership  owed  $11,582 and
$13,819,  respectively,  to related  parties for accounting  and  administrative
services  and  management  fees.  As of March  15,  2002,  the  Partnership  had
reimbursed  the  affiliates  all  such  amounts.  Other  liabilities,  including
distributions payable, decreased to $670,802 at December 31, 2001, from $719,023
at December 31, 2000,  primarily  due to a decrease in accrued real estate taxes
payable and rents paid in advance and deposits.  Total  liabilities  at December
31, 2001, to the extent they exceed cash and cash equivalents, will be paid from
anticipated  future cash from  operations,  or in the event the General Partners
elect to make additional capital contributions or loans, from the future General
Partners' contributions or loans.

Long-Term Liquidity

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

Critical Accounting Policies

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

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

         Management  reviews its  Properties and  investments in  unconsolidated
entities  periodically  (no less than once per  year)  for  impairment  whenever
events or changes in  circumstances  indicate  that the  carrying  amount of the
assets may not be recoverable through operations.  Management determines whether
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.  If an  impairment  is  indicated,  the assets are
adjusted to their fair value.

Results of Operations

         During  1999,  the  Partnership   owned  and  leased  22  wholly  owned
Properties,  and during 2000, the  Partnership  owned and leased 23 wholly owned
Properties  (including two Properties which were sold during 2000). During 2001,
the  Partnership  owned and leased 21 wholly owned  Properties  (including  four
Properties which were sold in 2001.) During 2001, the Partnership also owned and
leased  one  additional  Property.  In  addition,  during  2000  and  1999,  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.  During 2000 and 1999, the Partnership
was also a co-venturer in one additional joint venture that owned and leased one
Property and also owned and leased one  additional  Property with  affiliates of
the General Partners, as tenants-in-common  (including one Property in CNL/GC El
Cajon Joint Venture, which was sold in December 1999). In addition, during 2001,
the Partnership was a co-venturer in one additional joint venture that owned and
leased one  Property,  and also owned and leased one  additional  Property  with
affiliates of the General  Partners,  as  tenants-in-common.  As of December 31,
2001,  the  Partnership   owned,   either  directly  or  through  joint  venture
arrangements, 27 Properties which are generally 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 $57,300 to
$280,900.  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.  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, 2001 and 2000, the Partnership, and
for the year ended December 31, 1999, the Partnership and its consolidated joint
venture,  CNL/GC El Cajon  Joint  Venture,  earned  $1,963,677,  $2,232,836  and
$2,624,300,  respectively,  in rental  income from  operating  leases and earned
income from direct  financing  leases.  The decrease in rental and earned income
during  2001,  as  compared  to 2000,  was  primarily  attributable  to the lost
revenues from the fact that two and one  Properties  were sold in 2001 and 2000,
respectively.  The decrease  during 2001 was partially  offset by an increase in
rental and earned income of  approximately  $24,100 during 2001, due to the fact
that in 2001 and 2000, the Partnership reinvested in a Property in Austin, Texas
and in a Property in Wilmette, Illinois, respectively.

         The decrease in rental and earned income during 2001 and 2000,  each as
compared to the previous  year, was partially  attributable  to the fact that in
2000, the Partnership  stopped  recording  rental revenue  relating to a Denny's
Property in Mesquite,  Nevada and a Mr. Fable's Property in Kentwood,  Michigan.
In June 2001,  the  Partnership  sold the  Property in  Kentwood,  Michigan,  as
described above in "Capital Resources".  On October 31, 2001, Phoenix Restaurant
Group, Inc. and its Subsidiaries (collectively referred to as "PRG"), the tenant
of the remaining lease relating to the Property in Mesquite,  Nevada,  filed for
Chapter 11 bankruptcy  protection.  As a result of the  bankruptcy  filing,  PRG
rejected this lease. The General Partners will continue to pursue  collection of
past due rental amounts relating to these  Properties.  The Partnership does not
anticipate  it will  recognize  any rental  income  relating to the  Property in
Mesquite,  Nevada,  until such time as the  Partnership  executes a new lease or
until the Property is sold and the proceeds from such sales are reinvested in an
additional  Property.  The lost revenues resulting from this Property could have
an  adverse  effect on the  results  of  operations  of the  Partnership  if the
Partnership  is not able to re-lease or sell this  Property in a timely  manner.
The General  Partners are  currently  seeking a new tenant or purchaser for this
Property.

         The decrease in rental and earned  income  during 2000,  as compared to
1999,  was  partially  offset  by  an  increase  of  approximately   $42,000  in
unamortized  interim  rental income in 1999,  resulting  from the  Partnership's
consolidated joint venture, CNL/GC El Cajon Joint Venture, sale of its Property.
The balance was recognized in 1999 due to the fact that the lease was terminated
as a result of the sale.  The decrease  during 2000 was  partially  offset by an
increase in rental and earned income due to the fact that in January  2000,  the
Partnership  reinvested the liquidation  proceeds from the 1999 sale of El Cajon
Joint Venture in a Property in Wilmette, Illinois, as described above.

         Rental and earned  income  were also  impacted  by the fact that during
1998,  the tenant of three Boston Market  Properties  filed for  bankruptcy.  In
April 1999, the tenant  rejected,  vacated and ceased making rental  payments on
two of the three  leases  resulting  in a decrease  in rental and earned  income
during  1999 of  approximately  $135,800.  In July 2000,  the  tenant  rejected,
vacated and ceased  making  rental  payments on the third lease  resulting  in a
decrease  of rental and  earned  income  during  2000 of  approximately  $59,800
relating to these three  Properties.  In 2001 and 2000, the Partnership sold the
three Properties relating to these leases, as described in "Capital Resources."

         In addition,  for the years ended December 31, 2001, 2000 and 1999, the
Partnership  recorded a loss of $136,021  and income of $176,088  and  $182,132,
respectively,  attributable  to  net  income  earned  or  losses  recognized  by
unconsolidated  joint ventures in which the  Partnership  is a co-venturer.  Net
income earned by joint ventures decreased during 2001 and 2000, each as compared
to the previous year,  partially as a result of the Partnership and an affiliate
of the  General  Partners,  as  tenants-in-common,  of the  Property  in  Corpus
Christi,  Texas,  in which the  Partnership  owns an  approximate  27% interest,
stopped  recording rental revenues totaling  approximately  $194,100 and $42,900
during 2001 and 2000, respectively,  due to the fact that PRG, the tenant of the
Property  experienced  financial  difficulties.  In October 2001,  PRG filed for
bankruptcy,   as  described  above.   The  Partnership  and  an  affiliate,   as
tenants-in-common, will continue to pursue collection of past due rental amounts
relating to this Property.  Since future store  closings may occur,  the General
Partners  will continue to evaluate this  Property,  held with an affiliate,  as
tenants-in-common,  that PRG is  continuing  to operate as of March 15, 2001. In
addition,  the  Partnership  and the  affiliate,  as  tenants-in-common  of this
Property,  recorded a provision for write-down of assets of $356,719,  including
$114,329 in previously  accrued  rental income during 2001.  The accrued  rental
income was the accumulated amount of non-cash accounting  adjustments previously
recorded in order to recognize  future scheduled rent increases as income evenly
over the term of the lease. The provision  represents the difference between the
carrying value of the Property, including the accumulated accrued rental income,
at  December  31,  2001  and  the  General  Partners'  current  estimate  of net
realizable  value  for this  Property.  In  addition,  the  Partnership  and the
affiliate,  as tenants-in-common,  incurred approximately $58,400 in real estate
taxes during the 2001  relating to the Property in Corpus  Christi,  Texas.  The
tenant is still  responsible  for payment of these real  estate  taxes under the
terms of the lease. The Partnership and an affiliate, as tenants-in-common, will
pursue collection of these amounts.

         Net income  earned by joint  ventures  also  decreased  during 2001, as
compared to 2000, due to the fact that Ocean Shores Joint Venture,  in which the
Partnership owns an approximate 31%, stopped  recording rental revenues totaling
approximately $91,200 during 2001, due to financial  difficulties of the tenant.
The tenant of the Property  owned by the joint  venture  ceased  operations  and
vacated the Property in April 2001.  The joint  venture will  continue to pursue
collection of these past due rental  amounts.  The joint venture will not record
rental  income  relating  to this  Property  until it  locates  a new  tenant or
purchaser  for this  Property.  In  addition,  during  2001,  the joint  venture
recorded a provision for write-down of assets of $781,741,  including $43,392 in
previously  accrued  rental  income  relating to its  Property in Ocean  Shores,
Washington.  The accrued  rental income was the  accumulated  amount of non-cash
accounting   adjustments  previously  recorded  in  order  to  recognize  future
scheduled  rent  increases  as income  evenly  over the term of the  lease.  The
provision  represents the difference between the carrying value of the Property,
including the  accumulated  accrued rental income,  at December 31, 2001 and the
General  Partners'  estimate of the realizable value for this Property.  No such
amounts were recorded during 2000 and 1999.

         The  decrease  in net  income  earned  by joint  ventures  in 2001,  as
compared to 2000, was partially offset by an increase of approximately  $123,800
during 2001 as a result of the Partnership  investing during 2001 in CNL VII and
XVII Lincoln Joint Venture, and in an additional Property,  as tenants-in-common
with CNL Income Fund VI, Ltd. and CNL Income Fund IX, Ltd. as described above in
"Capital Resources".

         During  the  year  ended  December  31,  2001,   four  lessees  of  the
Partnership,  Golden Corral Corporation,  National Restaurant Enterprises, Inc.,
Jack in the Box  Inc.,  and RTM,  Inc.,  each  contributed  more than 10% of the
Partnership's total rental and earned income (including rental and earned income
from the  Partnership's  share of rental  income from four  Properties  owned by
unconsolidated joint ventures and five Properties owned with separate affiliates
of the General Partners as  tenants-in-common).  As of December 31, 2001, Golden
Corral Corporation was the lessee under leases relating to four restaurants, and
Jack in the Box Inc., National Restaurant Enterprises,  Inc. and RTM, Inc., were
each the lessee under leases  relating to three  restaurants.  It is anticipated
that based on the minimum  rental  payments  required by the leases,  these four
lessees  each  will  continue  to  contribute  more  than  ten  percent  of  the
Partnership's  total  rental  and  earned  income  in 2002.  In  addition,  four
Restaurant Chains, Golden Corral, Burger King, Jack in the Box, and Arby's, each
accounted for more than ten percent of the Partnership's total rental and earned
income  during the year ended  December  31, 2001  (including  rental and earned
income from the Partnership's  share of rental income from four Properties owned
by  unconsolidated  joint  ventures  and five  Properties  owned  with  separate
affiliates  of the  General  Partners  as  tenants-in-common).  In  2002,  it is
anticipated  that  each  of  these  four  Restaurant  Chains  will  continue  to
contribute more than ten percent of the  Partnership's  rental and earned income
to which the Partnership is entitled under the terms of the leases.  Any failure
of these lessees or Restaurant  Chains could have a material  adverse  affect on
the Partnership's  income if the Partnership is not able to re-lease or sell the
Properties in a timely manner.

         Operating expenses,  including  depreciation and amortization  expense,
and  provisions  for  write-down of assets,  were  $1,227,158,  $1,816,188,  and
$921,251 for the years ended December 31, 2001,  2000,  and 1999,  respectively.
The decrease in operating  expenses in 2001,  as compared to 2000 was  partially
due to, and the increase in 2000, as compared to 1999,  was partially due to the
fact that in 2000, the Partnership  recorded higher provisions for write-down of
assets.

         As of December  31,  2000,  the  Partnership  recorded a provision  for
write-down of assets of $28,644 in previously  accrued rental income relating to
the property in Mesquite,  Nevada.  The tenant of this property was experiencing
financial difficulties.  The accrued rental income was the accumulated amount of
non-cash accounting adjustments previously recorded in order to recognize future
scheduled  rent  increases  as income  evenly  over the term of the  lease.  The
provision represented the difference between the carrying value of the property,
including the  accumulated  accrued rental income,  at December 31, 2000 and the
general partners'  estimated net realizable value for the property.  As a result
of the PRG  bankruptcy,  as of  October  2001,  the  Partnership  increased  the
provision for write-down of assets by $201,002 to $229,646,  including  $118,604
in previously  accrued rental income,  relating to this property.  The provision
represented the difference between the carrying value of the property, including
the accumulated  accrued rental income, and the general partners'  estimated net
realizable  value  of  the  Property.  During  December  2001,  the  Partnership
increased  the  provision  for  write-down  of assets by $264,914  to  $464,560,
including  $118,604  in  previously  accrued  rental  income,  relating  to this
property. The provision represented the difference between the carrying value of
the property,  and the estimated net sales proceeds from the anticipated sale of
the Property. As of March 15, 2002, the sale had not occurred.

         In addition,  during 2000,  the  Partnership  recorded a provision  for
write-down of assets of $35,127 in previously  accrued rental income relating to
the Property  located in Houston,  Texas.  In October  1998,  the tenant of this
Boston Market Property filed for  bankruptcy,  and in July 2000,  rejected,  the
lease relating to this Property.  As a result,  the tenant  discontinued  making
rental  payments  on the  rejected  lease.  The  accrued  rental  income was the
accumulated amount of non-cash  accounting  adjustments  previously  recorded in
order to recognize  future  scheduled  rent  increases as income evenly over the
term of the lease. The provision represented the difference between the carrying
value of the Property,  including the accumulated accrued rental income, and the
General  Partners'  estimated net realizable  value of the Property.  In January
2001,  the  Partnership  sold this  property,  as  described  above in  "Capital
Resources.".

         During 2000,  the  Partnership  recorded a provision for  write-down of
assets of $19,091 in previously  accrued rental income  relating to the property
in Pensacola,  Florida.  The tenant of this property was experiencing  financial
difficulties.  The accrued rental income was the accumulated  amount of non-cash
accounting   adjustments  previously  recorded  in  order  to  recognize  future
scheduled  rent  increases  as income  evenly  over the term of the  lease.  The
provision represented the difference between the carrying value of the property,
including the  accumulated  accrued rental income,  at December 31, 2000 and the
general partners' estimated net realizable value for the property.  In 2001, the
tenant of this Property assigned its lease to Denny's, Inc.

         In 1999, the Partnership's  consolidated joint venture, CNL/GC El Cajon
Joint  Venture,  sold its Property.  As a result of the sale,  the joint venture
recorded a provision for write-down of assets of $172,496 in previously  accrued
rental  income  relating  to its  property.  The accrued  rental  income was the
accumulated amount of non-cash  accounting  adjustments  previously  recorded in
order to recognize  future  scheduled  rent  increases as income evenly over the
term of the lease. The provision represented the difference between the carrying
value of the property,  including the  accumulated  accrued rental  income,  and
estimated net sales  proceeds  from the  anticipated  sale of the  Property.  In
December 1999,  CNL/GC El Cajon Joint Venture,  the  Partnership's  consolidated
joint venture,  sold its property to its tenant,  as described above in "Capital
Resources."

         In addition,  during 2000,  the  Partnership  recorded a provision  for
write-down of assets in the amount of $193,464, including $106,365 in previously
accrued rental  income,  for its Property in Kentwood,  Michigan.  The tenant of
this  Property  defaulted  under the terms of its  lease and  ceased  restaurant
operations.  The accrued  rental income was the  accumulated  amount of non-cash
accounting   adjustments  previously  recorded  in  order  to  recognize  future
scheduled  rent  increases  as income  evenly  over the term of the  lease.  The
provision  represented the difference between the carrying value of the Property
, including the accumulated  accrued rental income, at December 31, 2000 and the
estimated net realizable value of the Property. No such provisions were recorded
during the years ended  December 31, 1999. In June 2001,  the  Partnership  sold
this Property, as described below.

         As of December  31,  1999,  the  Partnership  recorded a provision  for
write-down of assets of $34,951 in previously  accrued rental income relating to
the property in Long Beach,  California.  The tenant of this Property  filed for
bankruptcy in October 1998, and during 1999, rejected the lease relating to this
Property.  The  accrued  rental  income was the  accumulated  amount of non-cash
accounting   adjustments  previously  recorded  in  order  to  recognize  future
scheduled  rent  increases  as income  evenly  over the term of the  lease.  The
provision represented the difference between the carrying value of the property,
including the  accumulated  accrued rental income,  at December 31, 1999 and the
general partners' estimated net realizable value for the property.  During 2000,
the Partnership  increased the provision for write-down of assets by $353,622 to
$388,573. The provision represented the difference between the carrying value of
the Property, including the accumulated accrued rental income, and the net sales
proceeds received from the sale of this Property.

         As of December  31,  1999,  the  Partnership  recorded a provision  for
write-down of assets of $24,693 in previously  accrued rental income relating to
the property in Inglewood,  California.  The tenant of this  Property  filed for
bankruptcy in October 1998, and during 1999, rejected the lease relating to this
Property.  The  accrued  rental  income was the  accumulated  amount of non-cash
accounting   adjustments  previously  recorded  in  order  to  recognize  future
scheduled  rent  increases  as income  evenly  over the term of the  lease.  The
provision represented the difference between the carrying value of the property,
including the  accumulated  accrued rental income,  at December 31, 1999 and the
general partners' estimated net realizable value for the property.  During 2000,
the Partnership  increased the provision for write-down of assets by $477,971 to
$502,664. The provision represented the difference between the carrying value of
the Property,  including the accumulated  accrued rental income, and the General
Partners'  estimated net realizable  value for this  Property.  During 2001, the
Partnership  increased  the  provision  for  write-down  of assets by $39,575 to
reflect  the  difference  between the  carrying  value of the  Property  and the
anticipated net sales proceeds to be received by the  Partnership.  In September
2001, the Partnership  sold this Property to a third party. Due to the fact that
the  Partnership  had  previously  recorded a provision for  write-down for this
Property,  no additional gain or loss was recognized during 2001 relating to the
actual sale of the Property.

         In  addition,  the  decrease  in  operating  expenses  during  2001 was
partially  offset by the fact that the  Partnership  incurred  additional  state
taxes due to  changes in tax laws of a state in which the  Partnership  conducts
business  and  due to an  increase  in the  costs  incurred  for  administrative
expenses for servicing the Partnership  and its Properties,  as permitted by the
Partnership agreement.

         The decrease in operating  expenses  during 2001,  as compared to 2000,
and the increase in 2000, as compared to 1999, was partially attributable to the
fact that in 2000 the Partnership incurred certain expenses, such as legal fees,
real estate  taxes,  insurance,  and  maintenance  relating to the three  Boston
Market  Properties  whose  leases were  rejected by the tenant,  the two Denny's
Properties and the one Mr. Fable's  Property,  as described  above.  In 2001 and
2000, the Partnership sold the three vacant Boston Market Properties and the Mr.
Fable's  Property;  therefore,  the Partnership will not continue to incur these
expenses for these Properties.  However,  the Partnership will continue to incur
certain  expenses,  such as  legal  fees,  real  estate  taxes,  insurance,  and
maintenance relating to the remaining vacant Property in Mesquite,  Nevada until
a new  tenant or  purchaser  is  located  due to the fact that the lease of this
Property was rejected by PRG in 2001, as described  above.  The  Partnership  is
currently  seeking  either a  replacement  tenant or  purchaser  for the  vacant
Property.

         The decrease in operating  expenses  during 2001,  as compared to 2000,
was partially due to a decrease in depreciation expense due to the fact that the
Partnership sold five Properties throughout 2001 and 2000, as described above in
"Capital Resources." The increase in operating expenses during 2000, as compared
to 1999, was partially  attributable to an increase in depreciation  expense due
to the purchase of a Property during 2000, as described in "Capital  Resources."
The  decrease in  operating  expenses  during  2001,  as  compared to 2000,  was
partially due to, and the increase in 2000,  as compared to 1999,  was partially
offset  by,  the fact  that  during  2000 and  1999,  the  Partnership  incurred
approximately  $18,700 and $84,800 in  transaction  costs related to the General
Partners retaining financial and legal advisors to assist them in evaluating and
negotiating the proposed merger with CNL American Properties Fund, Inc. ("APF").
In June 1999,  the General  Partners  and APF mutually  agreed to terminate  the
merger. No such expenses were incurred during 2001.

         During 2001, as described above in "Capital Resources," the Partnership
sold its Property in Houston, Texas, and recorded a gain of $4,284, and sold the
Property in Kentwood, Michigan, and recorded a loss of $38,877. During 2001, the
Partnership also sold its Property in El Dorado,  California, as described above
in "Capital  Resources"  and  recorded a gain of $345,572.  In addition,  during
September  2000, the  Partnership  sold the Property in Warner Robins,  Georgia,
resulting in a gain of $17,447. No Properties were sold during 1999.

         As a result of the dissolution of the Partnership's  consolidated joint
venture,  CNL/GC El Cajon Joint Venture,  the  Partnership  recognized a loss on
dissolution  of $82,914  during the year ended  December 31, 1999,  as described
above in "Capital Resources." No such loss was recorded during 2001 and 2000.

         The  restaurant  industry,  as a  whole,  has  been  one  of  the  many
industries  affected  by  the  general  slowdown  in  the  economy.   While  the
Partnership has experienced  some losses due to the financial  difficulties of a
limited number of restaurant operators, the General Partners remain confident in
the overall  performance  of the  fast-food  and family style  restaurants,  the
concepts that  comprise the  Partnership's  portfolio.  Industry data shows that
these  restaurant  concepts  continue to outperform  and remain more stable than
higher-end  restaurants,  those that have been more  adversely  affected  by the
slowing economy.

         The  Partnership's  leases  as of  December  31,  2001,  are  generally
triple-net  leases and  contain  provisions  that the General  Partners  believe
mitigate  the adverse  effect of  inflation.  Such  provisions  include  clauses
requiring the payment of percentage rent based on certain restaurant sales above
a specified  level and/or  automatic  increases in based rent at specified times
during the term of the lease.  Inflation,  overall,  has had a minimal effect on
results of operations of the Partnership.  Continued inflation may cause capital
appreciation of the  Partnership's  Properties.  Inflation and changing  prices,
however,  also may have an adverse impact on the sales of the restaurants and on
potential capital appreciation of the Properties.

         In December 1999, the Securities and Exchange  Commission  released SAB
101, which provides the staff's view in applying generally  accepted  accounting
principles  to  selected  revenue  recognition  issues.  SAB  101  requires  the
Partnership  to defer  recognition  of certain  percentage  rental  income until
certain defined  thresholds are met. The  Partnership  adopted SAB 101 beginning
January 1, 2000. Implementation of SAB 101 did not have a material impact on the
Partnership's result of operations.

         In July 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 141 "Business  Combinations" (FAS 141) and
Statement  of  Financial  Accounting  Standards  No.  142  "Goodwill  and  Other
Intangible  Assets" (FAS 142). The  Partnership has reviewed both statements and
has determined  that both FAS 141 and FAS 142 do not apply to the Partnership as
of December 31, 2001.

         In October  2001,  the  Financial  Accounting  Standards  Board  issued
Statement  of  Financial  Accounting  Standards  No.  144  "Accounting  for  the
Impairment or Disposal of Long-Lived  Assets" (FAS 144). This statement requires
that a long-lived asset be tested for recoverability  whenever events or changes
in circumstances  indicate that its carrying amount may not be recoverable.  The
carrying  amount of a long-lived  asset is not recoverable if it exceeds the sum
of the  undiscounted  cash flows  expected to result  from the use and  eventual
disposition of the asset.  The assessment is based on the carrying amount of the
asset  at the  date it is  tested  for  recoverability.  An  impairment  loss is
recognized  when the  carrying  amount of a  long-lived  asset  exceeds its fair
value.  If an  impairment  is  recognized,  the  adjusted  carrying  amount of a
long-lived asset is its new cost basis. The adoption of FAS 144 did not have any
effect on the  partnership's  recording of impairment  losses as this  Statement
retained  the  fundamental  provisions  of  FAS  No.  121  "Accounting  for  the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of".

Termination of Merger

         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. Subsequent to entering into the Merger agreement,  the
General  Partners  received  a number  of  comments  from  brokers  who sold the
Partnership's units concerning the loss of passive income treatment in the event
the  Partnership  merged with APF. On June 3, 1999,  the  General  Partners,  on
behalf of the Partnership, and APF agreed that it would be in the best interests
of the  Partnership  and APF that APF not attempt to acquire the  Partnership in
the  acquisition.  Therefore  in  June  1999,  APF  entered  into a  termination
agreement with the General Partners of the Partnership.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

         Not applicable.


Item 8.  Financial Statements and Supplementary Data


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

                                                     CONTENTS








                                                                          Page

Report of Independent Certified Public Accountants                         20

Financial Statements:

     Balance Sheets                                                        21

     Statements of Income                                                  22

     Statements of Partners' Capital                                       23

     Statements of Cash Flows                                           24-25

     Notes to Financial Statements                                      26-45







               Report of Independent Certified Public Accountants




To the Partners
CNL Income Fund XVII, Ltd.


In our opinion,  the accompanying  balance sheets and the related  statements of
income,  of partners'  capital and of cash flows present fairly, in all material
respects,  the  financial  position  of CNL Income  Fund XVII,  Ltd.  (a Florida
limited  partnership)  at  December  31,  2001 and 2001,  and the results of its
operations  and its cash flows for each of the three  years in the period  ended
December 31, 2001 in conformity with accounting principles generally accepted in
the United  States of  America.  In  addition,  in our  opinion,  the  financial
statement  schedules  listed in the index appearing under item 14(a)(2)  present
fairly, in all material respects, the information set forth therein when read in
conjunction with the related financial  statements.  These financial  statements
and  the  financial   statement   schedules  are  the   responsibility   of  the
Partnership's  management;  our responsibility is to express an opinion on these
financial  statements and the financial statement schedules based on our audits.
We  conducted  our  audits  of these  statements  in  accordance  with  auditing
standards generally accepted in the United States of America, which require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial   statements,   assessing  the  accounting  principles  used  and
significant  estimates made by management,  and evaluating the overall financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for our opinion.



/s/ PricewaterhouseCoopers LLP

Orlando, Florida
February 8, 2002, except for Note 12, as to which the date is March 22, 2002
<page>
                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                                 BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                                          December 31,
                                                                                  2001                   2000
                                                                            -----------------      ------------------

 <c>
                          ASSETS

Land and buildings on operating leases, net                                     $ 16,975,990            $ 18,604,190
Net investment in direct financing leases                                            988,429               1,805,572
Investment in joint ventures                                                       3,658,974               1,978,787
Cash and cash equivalents                                                            673,924               1,597,502
Restricted cash                                                                      297,288                      --
Receivables, less allowance for doubtful
     accounts of $286,567 and $254,586, respectively                                   2,709                  33,711
Due from related parties                                                              19,289                   4,893
Accrued rental income, less allowance for
     doubtful accounts of $47,735 in 2000                                            571,891                 633,062
Other assets                                                                           5,854                  17,893
                                                                            -----------------      ------------------

                                                                                $ 23,194,348            $ 24,675,610
                                                                            =================      ==================

            LIABILITIES AND PARTNERS' CAPITAL

Accounts payable and accrued expenses                                              $   8,974                $  4,385
Accrued real estate taxes payable                                                         --                  22,277
Distributions payable                                                                600,000                 600,000
Due to related parties                                                                11,582                  13,819
Rents paid in advance and deposits                                                     8,350                  35,403
Deferred rental income                                                                53,478                  56,958
                                                                            -----------------      ------------------
         Total liabilities                                                           682,384                 732,842

Partners' capital                                                                 22,511,964              23,942,768
                                                                            -----------------      ------------------

                                                                                $ 23,194,348            $ 24,675,610
                                                                            =================      ==================
                See accompanying notes to financial statements.
<page>
                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                              STATEMENTS OF INCOME

                                                                               Year Ended December 31,
                                                                      2001               2000              1999
                                                                 ----------------   ---------------   ----------------

 Revenues:
      Rental income from operating leases                           $  1,898,595      $  2,088,220       $  2,271,450
      Earned income from direct financing leases                          65,082           144,616            352,850
      Interest and other income                                           57,719            62,955             68,463
                                                                 ----------------   ---------------   ----------------
                                                                       2,021,396         2,295,791          2,692,763
                                                                 ----------------   ---------------   ----------------
 Expenses:
      General operating and administrative                               235,944           146,978            130,270
      Professional services                                               43,800            50,721             30,086
      Management fee to related party                                     21,315            22,591             25,246
      Real estate taxes                                                   38,973            61,764             20,254
      State and other taxes                                               34,733            12,064             13,505
      Depreciation and amortization                                      346,902           395,456            384,985
      Provision for write-down of assets                                 505,491         1,107,919            232,140
      Transaction costs                                                       --            18,695             84,765
                                                                 ----------------   ---------------   ----------------
                                                                       1,227,158         1,816,188            921,251
                                                                 ----------------   ---------------   ----------------
 Income Before Loss on Dissolution of Consolidated Joint
      Venture, Gain on Sale of Assets, Minority Interest in
      Income of Consolidated Joint Venture, and Equity in
      Earnings (Loss) of Unconsolidated Joint Ventures,                  794,238           479,603          1,771,512

 Loss on Dissolution of Consolidated Joint Venture                            --                --            (82,914  )

 Gain on Sale of Assets                                                  310,979            17,447                 --

 Minority Interest in Income of Consolidated
      Joint Venture                                                           --                --            (31,461  )

 Equity in Earnings (Loss) of Unconsolidated Joint Ventures             (136,021  )        176,088            182,132
                                                                 ----------------   ---------------   ----------------

 Net Income                                                          $   969,196       $   673,138       $  1,839,269
                                                                 ================   ===============   ================

 Allocation of Net Income
      General partners                                                  $     --          $     --        $   (3,850)
      Limited partners                                                   969,196           673,138          1,843,119
                                                                 ----------------   ---------------   ----------------
                                                                         969,196       $   673,138       $  1,839,269
                                                                 ================   ===============   ================

 Net Income Per Limited Partner Unit                                  $     0.32        $     0.22         $     0.61
                                                                 ================   ===============   ================

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

                See accompanying notes to financial statements.
<page>
                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                         STATEMENTS OF PARTNERS' CAPITAL

                  Years Ended December 31, 2001, 2000, and 1999


                                                 General Partners                                          Limited Partners
                                         -----------------------------------    ----------------------------------------------------
                                                          Accumulated                                               Accumulated
                                         Contributions     Earnings         Contributions       Distributions         Earnings
                                         ---------------- --------------   -----------------   ----------------   -----------------

Balance, December 31, 1998                   $     1,000    $    (1,610 )     $  30,000,000       $ (5,882,464 )      $  5,703,435

    Distributions to limited partners
       ($0.80 per limited partner unit)               --             --                  --         (2,400,000 )                --
    Net income                                        --         (3,850 )                --                 --           1,843,119
                                         ---------------- --------------   -----------------   ----------------   -----------------

Balance, December 31, 1999                         1,000         (5,460 )        30,000,000         (8,282,464 )         7,546,554

    Distributions to limited partners
       ($0.80 per limited partner unit)               --             --                  --         (2,400,000 )                --
    Net income                                        --             --                  --                 --             673,138
                                         ---------------- --------------   -----------------   ----------------   -----------------

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

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

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




                                  See accompanying notes to financial statements.
<page>

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

   $ (3,590,000 )    $26,230,361


             --       (2,400,000 )
             --        1,839,269
  --------------   --------------

     (3,590,000 )     25,669,630


             --       (2,400,000 )
             --          673,138
  --------------   --------------

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


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

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


                See accompanying notes to financial statements.




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

                            STATEMENTS OF CASH FLOWS


                                                                                      Year Ended December 31,
                                                                            2001               2000                1999
                                                                       ---------------    ----------------    ----------------

Increase (Decrease) in Cash and Cash Equivalents:

      Cash Flows from Operating Activities:
         Cash received from tenants                                       $ 1,872,564         $ 2,046,220         $ 2,436,836
         Distributions from unconsolidated joint
             ventures                                                         246,426             158,725             182,752
         Cash paid for expenses                                              (374,234 )          (388,529 )          (213,754 )
         Interest received                                                     39,687              29,806              44,184
                                                                       ---------------    ----------------    ----------------
                Net cash provided by operating activities                   1,784,443           1,846,222           2,450,018
                                                                       ---------------    ----------------    ----------------

      Cash Flows from Investing Activities:
         Additions to land and buildings on
             operating leases                                              (1,216,598 )        (1,630,164 )                --
         Proceeds from sale of assets                                       3,272,711           1,136,991                  --
         Investment in joint ventures                                      (2,066,846 )               (12 )          (527,864 )
         Proceeds from dissolution of consolidated joint
             venture                                                               --                  --           2,094,231
         Increase in restricted cash                                         (297,288 )                --                  --
                                                                       ---------------    ----------------    ----------------
                Net cash provided by (used in) investing
                  activities                                                 (308,021 )          (493,185 )         1,566,367
                                                                       ---------------    ----------------    ----------------

      Cash Flows from Financing Activities:
         Distributions to limited partners                                 (2,400,000 )        (2,400,000 )        (2,400,000 )
         Distributions to holder of minority interest                              --                  --             (46,567 )
         Distribution to holder of minority interest on
             dissolution of consolidated joint venture                             --                  --            (417,696 )
                                                                       ---------------    ----------------    ----------------
                Net cash used in financing activities                      (2,400,000 )        (2,400,000 )        (2,864,263 )
                                                                       ---------------    ----------------    ----------------

Net Increase (Decrease) in Cash and Cash Equivalents                         (923,578 )        (1,046,963 )         1,152,122

Cash and Cash Equivalents at Beginning of Year                              1,597,502           2,644,465           1,492,343
                                                                       ---------------    ----------------    ----------------

Cash and Cash Equivalents at End of Year                                   $  673,924         $ 1,597,502         $ 2,644,465
                                                                       ===============    ================    ================
                See accompanying notes to financial statements.
<page>

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

                      STATEMENTS OF CASH FLOWS - CONTINUED


                                                                                      Year Ended December 31,
                                                                            2001               2000                1999
                                                                       ---------------    ----------------    ----------------

Reconciliation of Net Income to Net Cash
   Provided by Operating Activities:

      Net income                                                           $  969,196          $  673,138         $ 1,839,269
                                                                       ---------------    ----------------    ----------------
      Adjustments to reconcile net income to net cash
         provided by operating activities:
             Depreciation                                                     342,690             391,244             372,148
             Amortization                                                       4,212               4,212              12,837
             Provision for write-down of assets                               505,491             918,692                  --
             Loss on dissolution of joint venture                                  --                  --              82,914
             Minority interest in income of consolidated
                joint venture                                                      --                  --              31,461
             Equity in earnings of unconsolidated joint
                ventures, net of distributions                                382,447             (15,970 )               620
             Gain on sale of assets                                          (310,979 )           (17,447 )                --
             Decrease (increase) in receivables                                26,719              13,632             (47,223 )
             Increase in due from related parties                             (14,396 )              (954 )              (439 )
             Decrease in net investment in direct financing
                leases                                                         35,649              35,011              38,950
             Decrease (increase) in accrued rental income                    (118,167 )            18,396             (67,188 )
             Decrease (increase) in other assets                               12,039             (14,241 )            (3,122 )
             Increase (decrease) in accounts payable,
                accrued expenses, and accrued real estate
                taxes payable                                                 (17,688 )           (62,522 )            85,586
             Increase (decrease) in due to related parties                     (2,237 )            (9,778 )             9,149
             Increase (decrease) in rents paid in advance
                and deposits                                                  (27,053 )           (83,710 )            98,535
             Decrease in deferred rental income                                (3,480 )            (3,481 )            (3,479 )
                                                                       ---------------    ----------------    ----------------
                   Total adjustments                                          815,247           1,173,084             610,749
                                                                       ---------------    ----------------    ----------------

Net Cash Provided by Operating Activities                                 $ 1,784,443         $ 1,846,222         $ 2,450,018
                                                                       ===============    ================    ================

Supplemental Schedule of Non-Cash Investing and
    Financing Activities:

      Distributions declared and unpaid at December 31                     $  600,000          $  600,000          $  600,000
                                                                        ===============    ================    ================
</TABLE>

See accompanying notes to financial statements.

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

                          NOTES TO FINANCIAL STATEMENTS

                 Years Ended December 31, 2001, 2000, and 1999


1.       Significant Accounting Policies:

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

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

         Real  Estate  and  Lease  Accounting  -  The  Partnership  records  the
         acquisition of land and buildings at cost,  including  acquisition  and
         closing costs. Land and buildings are leased to unrelated third parties
         generally  on a  triple-net  basis,  whereby  the  tenant is  generally
         responsible  for  all  operating  expenses  relating  to the  property,
         including  property  taxes,  insurance,  maintenance  and repairs.  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, 2001, 2000, and 1999


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
                  reverses 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,  are removed  from the  accounts and gains or losses from sales
         are reflected in income. The general partners of the Partnership review
         properties for impairment  whenever events or changes in  circumstances
         indicate that the carrying  amount of the assets may not be recoverable
         through   operations.   The  general  partners   determine  whether  an
         impairment  in value has occurred by  comparing  the  estimated  future
         undiscounted cash flows,  including the residual value of the property,
         with the carrying cost of the individual property. 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,
         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.

<page>

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000, and 1999


1.       Significant Accounting Policies - Continued:

         Investment in Joint  Ventures - Prior to the  liquidation  of CNL/GC El
         Cajon Joint Venture in December 1999, the Partnership accounted for its
         80%  interest in such 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.

         The  Partnership's  investments  in CNL  Kingston  Joint  Venture;  CNL
         Mansfield Joint Venture; Ocean Shores Joint Venture; and CNL VII & XVII
         Lincoln  Joint  Venture;  and a property in Corpus  Christi,  Texas;  a
         property in Akron, Ohio; a property in Fayetteville,  North Carolina; a
         property in Zephyrhills, Florida; and Waldorf, Maryland, for which each
         property  is held as  tenants-in-common,  are  accounted  for using the
         equity method since each joint venture  agreement  requires the consent
         of all partners on all key decisions  affecting  the  operations of the
         underlying property.

         Cash and Cash Equivalents - The Partnership considers all highly liquid
         investments  with a maturity of three months or less when  purchased to
         be cash  equivalents.  Cash  and cash  equivalents  consist  of  demand
         deposits at commercial banks,  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.

         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. See "Income Taxes"
         footnote for a  reconciliation  of net income for  financial  reporting
         purposes to net income for federal income tax purposes.

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000, and 1999


1.       Significant Accounting Policies - Continued:

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

         Reclassifications  -  Certain  items  in  the  prior  years'  financial
         statements  have been  reclassified  to conform  to 2001  presentation.
         These reclassifications had no effect on total partners' capital or net
         income.

         Staff Accounting  Bulleting No. 101 ("SAB 101") - In December 1999, the
         Securities and Exchange Commission released SAB 101, which provides the
         staff's view in applying  generally accepted  accounting  principles to
         selected revenue  recognition  issues. SAB 101 requires the Partnership
         to defer recognition of certain  percentage rental income until certain
         defined  thresholds are met. The Partnership  adopted SAB 101 beginning
         January  1,  2000.  Implementation  of SAB 101 did not have a  material
         impact on the Partnership's result of operations.

         Statement of  Financial  Accounting  Standards  No. 141 ("FAS 141") and
         Statement of Financial  Accounting  Standards  No. 142 ("FAS 142") - In
         July 2001, the Financial Accounting Standards Board issued Statement of
         Financial  Accounting  Standards  No. 141 "Business  Combinations"  and
         Statement of Financial Accounting Standards No. 142 "Goodwill and Other
         Intangible  Assets".  The  Partnership has reviewed both statements and
         has  determined  that  both  FAS 141 and  FAS 142 do not  apply  to the
         Partnership as of December 31, 2001.

         Statement of Financial  Accounting  Standards  No. 144 ("FAS 144") - In
         October 2001, the Financial Accounting Standards Board issued Statement
         of  Financial   Accounting   Standards  No.  144  "Accounting  for  the
         Impairment or Disposal of Long-Lived  Assets".  This statement requires
         that a long-lived asset be tested for recoverability whenever events or
         changes in  circumstances  indicate that its carrying amount may not be
         recoverable.   The  carrying  amount  of  a  long-lived  asset  is  not
         recoverable  if it  exceeds  the  sum of the  undiscounted  cash  flows
         expected to result from the use and eventual  disposition of the asset.
         The assessment is based on the carrying amount of the asset at the date
         it is tested for recoverability.  An impairment loss is recognized when
         the carrying amount of a long-lived asset exceeds its fair value. If an
         impairment is recognized,  the adjusted carrying amount of a long-lived
         asset is its new cost basis. The


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


                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000, and 1999


1.       Significant Accounting Policies - Continued:

         adoption  of FAS 144 did  not  have  any  effect  on the  partnership's
         recording  of  impairment   losses  as  this  Statement   retained  the
         fundamental provisions of FAS No. 121 "Accounting for the Impairment of
         Long-Lived Assets and for Long-Lived Assets to be Disposed of."

2.       Leases:

         The Partnership  leases its land and buildings to operators of national
         and regional fast-food and family-style and casual dining  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 some of 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, generally 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.

3.       Land and Buildings on Operating Leases:

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

                                                                     2001                   2000
                                                              -------------------    -------------------

 <c>
                 Land                                               $  8,117,235           $  9,055,815
                 Buildings                                            10,449,654             11,118,005
                                                              -------------------    -------------------
                                                                      18,566,889             20,173,820
                 Less accumulated depreciation                        (1,590,899 )           (1,569,630 )
                                                              -------------------    -------------------
                                                                    $ 16,975,990           $ 18,604,190
                                                              ===================    ===================
</TABLE>
<page>

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000, and 1999


3.       Land and Buildings on Operating Leases - Continued:

         During 1999, the Partnership's  consolidated  Joint Venture,  CNL/GC El
         Cajon Joint  Venture,  recorded a provision for write-down of assets of
         approximately  $172,496 in previously accrued rental income relating to
         its property.  The accrued rental income was the accumulated  amount of
         non-cash  accounting   adjustments  previously  recorded  in  order  to
         recognize  future  scheduled  rent  increases as income evenly over the
         term of the lease. The provision represented the difference between the
         carrying  value of the  property,  including  the  accumulated  accrued
         rental income,  and estimated net sales  proceeds from the  anticipated
         sale of the Property.  In December 1999, CNL/GC El Cajon Joint Venture,
         the Partnership's  consolidated joint venture, sold its property to its
         tenant for  $2,094,231.  In January 2000,  the  Partnership  reinvested
         approximately  $1,630,200 of the net sales  proceeds in a Bakers Square
         located in Wilmette, Illinois (see Note 9).

         During 1999,  the  Partnership  recorded a provision for  write-down of
         assets of $34,951 in previously  accrued rental income  relating to the
         property in Long Beach,  California.  The tenant of this Property filed
         for  bankruptcy  in October 1998,  and during 1999,  rejected the lease
         relating  to  this   Property.   The  accrued  rental  income  was  the
         accumulated  amount  of  non-cash  accounting   adjustments  previously
         recorded in order to  recognize  future  scheduled  rent  increases  as
         income evenly over the term of the lease. The provision represented the
         difference  between the carrying  value of the property,  including the
         accumulated accrued rental income, at December 31, 1999 and the general
         partners' estimated net realizable value for the property. During 2000,
         the  Partnership  increased the  provision for  write-down of assets by
         $353,622 to $388,573,  including  $34,951 in previously  accrued rental
         income,  relating  to this  Property.  The  provision  represented  the
         difference  between the carrying  value of the Property,  including the
         accumulated  accrued rental income, and the net sales proceeds received
         from the sale of this Property.  In October 2000, the Partnership  sold
         this  property to a third party for  $533,500  and  received  net sales
         proceeds of approximately  $530,000.  Due to the fact that in 2000, the
         Partnership  had recorded a provision for write-down of assets for this
         property,  no  additional  gain or loss was  recognized in October 2000
         relating to the sale of the property.

         During 1999,  the  Partnership  recorded a provision for  write-down of
         assets of $24,693 in previously  accrued rental income  relating to the
         property in Inglewood,  California.  The tenant of this Property  filed
         for  bankruptcy  in October 1998,  and during 1999,  rejected the lease
         relating  to  this   Property.   The  accrued  rental  income  was  the
         accumulated  amount  of  non-cash  accounting   adjustments  previously
         recorded in order to  recognize  future  scheduled  rent  increases  as
         income evenly over the term of the lease. The provision represented the
         difference  between the carrying  value of the property,  including the
         accumulated accrued rental income, at December 31, 1999 and the general
         partners' estimated net realizable value for the property. During 2000,
         the Partnership increased


<page>

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000, and 1999


3.       Land and Buildings on Operating Leases - Continued:

         the  provision for  write-down  of assets by $477,971 to $502,664.  The
         provision  represented the difference between the carrying value of the
         Property,  including the accumulated accrued rental income, at December
         31, 2000 and the general  partners'  estimated net realizable value for
         this  property.  At  June  30,  2001,  the  Partnership  increased  the
         provision by $39,575 to $542,239.  The adjusted  provision  represented
         the  difference  between the carrying value of the property at June 30,
         2001 and the net sales  proceeds  anticipated  to be received  from the
         sale of the property.  In September  2001,  the  Partnership  sold this
         property to a third party for $300,000 and received net sales  proceeds
         of approximately  $298,300. Due to the fact that during second quarter,
         the  Partnership  had  recorded  a  provision  for  write-down  of this
         property,  no additional  gain or loss was recognized in September 2001
         relating to the sale of the property.

         In September 2000, the Partnership  sold its property in Warner Robins,
         Georgia,  to a third party for $609,861 and received net sales proceeds
         of approximately $607,400, resulting in a gain of $17,447. During 2000,
         the  Partnership  recorded  a  provision  for  write-down  of assets of
         $19,091 in previously accrued rental income relating to the property in
         Pensacola,  Florida.  The  tenant  of this  property  was  experiencing
         financial  difficulties.  The accrued rental income was the accumulated
         amount of non-cash accounting  adjustments previously recorded in order
         to recognize  future scheduled rent increases as income evenly over the
         term of the lease. The provision represented the difference between the
         carrying  value of the  property,  including  the  accumulated  accrued
         rental income, at December 31, 2000 and the general partners' estimated
         net realizable value for the property.

         In addition,  during 2000,  the  Partnership  recorded a provision  for
         write-down  of assets of $35,127 in  previously  accrued  rental income
         relating to the property  located in Houston,  Texas.  In October 1998,
         the tenant of this Boston Market Property filed for bankruptcy,  and in
         July 2000, rejected,  the lease relating to this Property. As a result,
         the tenant  discontinued  making rental payments on the rejected lease.
         The  accrued  rental  income  was the  accumulated  amount of  non-cash
         accounting adjustments previously recorded in order to recognize future
         scheduled  rent  increases as income evenly over the term of the lease.
         The provision  represented the difference between the carrying value of
         the property,  including the accumulated accrued rental income, and the
         general  partners'  estimated net realizable value of the property.  In
         January 2001, the Partnership sold its property in Houston,  Texas to a
         third  party  for  $812,696   and   received  net  sales   proceeds  of
         approximately $782,700, resulting in a gain of $4,284.

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000, and 1999


3.       Land and Buildings on Operating Leases - Continued:

         In 2000, the Partnership  recorded a provision for write-down of assets
         in the amount of $193,464,  including  $106,365 in  previously  accrued
         rental income,  for its Property in Kentwood,  Michigan.  The tenant of
         this  Property  defaulted  under  the  terms of its  lease  and  ceased
         restaurant  operations.  The accrued rental income was the  accumulated
         amount of non-cash accounting  adjustments previously recorded in order
         to recognize  future scheduled rent increases as income evenly over the
         term of the lease. The provision represented the difference between the
         carrying  value of the  Property,  including  the  accumulated  accrued
         rental  income,  at December 31, 2000 and the estimated net  realizable
         value  of the  Property.  In  June  2001,  the  Partnership  sold  this
         property,  received net sales  proceeds of  approximately  $681,200 and
         recorded a loss of $38,877.

         During  December  2000,  the  Partnership   recorded  a  provision  for
         write-down  of assets of $28,644 in  previously  accrued  rental income
         relating  to the  property  in  Mesquite,  Nevada.  The  tenant of this
         property was experiencing  financial  difficulties.  The accrued rental
         income was the accumulated  amount of non-cash  accounting  adjustments
         previously  recorded  in  order  to  recognize  future  scheduled  rent
         increases as income  evenly over the term of the lease.  The  provision
         represented the difference  between the carrying value of the property,
         including the accumulated  accrued rental income,  at December 31, 2000
         and the  general  partners'  estimated  net  realizable  value  for the
         property.  As a result of the PRG  bankruptcy,  as of October 2001, the
         Partnership increased the provision for write-down of assets by $89,960
         to  $118,604  in  previously  accrued  rental  income  relating to this
         property. The provision represented the difference between the carrying
         value of the property, including the accumulated accrued rental income,
         and  the  general  partners'  estimated  net  realizable  value  of the
         Property. During December 2001, the Partnership increased the provision
         for write-down of assets by $264,914 to $383,518, including $118,604 in
         previously  accrued  rental  income,  relating  to this  property.  The
         provision  represented the difference between the carrying value of the
         property,  and the  estimated net sales  proceeds from the  anticipated
         sale of the Property. As of March 15, 2002, the sale had not occurred.

         In September 2001, the Partnership also sold its property in El Dorado,
         California  to a third  party for  $1,553,500  and  received  net sales
         proceeds of  approximately  $1,510,500  resulting in a gain of $345,572
         (see  Note  6).  In   December   2001,   the   Partnership   reinvested
         approximately  $1,216,600 of net sales proceeds  received in a Property
         in Austin,  Texas. The Partnership  acquired this Property from 2001-A,
         LP, an affiliate of the general partners (see Note 9).


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000, and 1999


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, 2001:

                             2002                                $1,833,160
                             2003                                 1,846,717
                             2004                                 1,849,361
                             2005                                 1,867,839
                             2006                                 1,896,155
                             Thereafter                          16,835,325
                                                            ----------------

                                                                $26,128,557
                                                            ================

         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>

                                                                  2001                  2000
                                                            -----------------     -----------------

 <c>
                   Minimum lease payments
                        receivable                               $ 1,733,118           $ 3,308,029
                   Estimated residual values                         271,355               485,703
                   Less unearned income                           (1,016,044 )          (1,988,160 )
                                                            -----------------
                                                                                  -----------------
                   Net investment in direct
                        financing leases                          $  988,429           $ 1,805,572
                                                            =================     =================
</TABLE>
<page>

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000, and 1999


4.       Net Investment in Direct Financing Leases - Continued:

         During 2001, the Partnership  established a provision for write-down of
         assets of $111,042 for its property in Mesquite, Nevada due to the fact
         that the on October 31, 2001,  Phoenix  Restaurant  Group, Inc. and its
         Subsidiaries  (collectively  referred  to as  "PRG"),  a tenant  of the
         Partnership,  filed for Chapter 11 bankruptcy  protection  and rejected
         the lease  relating to this  property.  The provision  represented  the
         difference  between the  carrying  value of the net  investment  in the
         direct  financing  lease  and  the  general  partners'   estimated  net
         realizable  value of the  investment in the direct  financing  lease at
         December 31, 2001. The Partnership reclassified the rejected lease from
         direct financing leases to land and buildings on operating  leases.  In
         accordance with the Statement of Financial Accounting Standards No. 13,
         "Accounting  for Leases,"  the  Partnership  recorded the  reclassified
         leases at the lower of original  cost,  present fair value,  or present
         carrying  amount.  No losses  on the  termination  of direct  financing
         leases were recorded.

         The  following  is a schedule of future  minimum  lease  payments to be
         received on direct financing leases at December 31, 2001:

                            2002                              $ 121,091
                            2003                                121,091
                            2004                                121,091
                            2005                                121,091
                            2006                                121,091
                            Thereafter                        1,127,663
                                                       -----------------

                                                             $1,733,118
                                                       =================

         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:

         The Partnership owns properties in Fayetteville, North Carolina; Corpus
         Christi,   Texas;   Akron,   Ohio;   and   Zephyrhills,   Florida,   as
         tenants-in-common  with  affiliates  of  the  general  partners.  As of
         December 31, 2001, the Partnership  owned interests in these properties
         of 19.56%, 27.42%, 36.91% and 24%, respectively.

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000, and 1999


5.       Investment in Joint Ventures - Continued:

         The Partnership has a 21%, a 60.06% and a 30.94%interest in the profits
         and losses of CNL Mansfield Joint Venture,  CNL Kingston Joint Venture,
         and Ocean Shores Joint Venture,  respectively.  The remaining interests
         in these joint ventures are held by affiliates of the Partnership which
         have the same general partners.

         In  April  2001,   the   Partnership   entered  into  a  joint  venture
         arrangement, CNL VII & XVII Lincoln Joint Venture, with CNL Income Fund
         VII,  Ltd.,  a Florida  limited  partnership  and an  affiliate  of the
         general partners,  to hold one restaurant  property.  The joint venture
         acquired this  property from CNL BB Corp.,  an affiliate of the general
         partners  (see  Note  9).  The  Partnership  contributed  approximately
         $1,496,700 to the joint venture to acquire the restaurant property.  As
         of December  31,  2001,  the  Partnership  owns an 86%  interest in the
         profits and losses of the joint venture.

         In July  2001,  the  Partnership  invested  in a property  in  Waldorf,
         Maryland as  tenants-in-common  with CNL Income  Fund VI, Ltd.  and CNL
         Income Fund IX, Ltd.,  each of which are Florida  limited  partnerships
         and  affiliates of the general  partners.  As of December 31, 2001, the
         Partnership  contributed  approximately  $570,100 for a 25% interest in
         the property.

         CNL Mansfield Joint Venture,  CNL Kingston Joint Venture,  Ocean Shores
         Joint Venture, CNL VII & XVII Lincoln Joint Venture and the Partnership
         and affiliates, as tenants-in-common in five 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:

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000, and 1999


5.       Investment in Joint Ventures - Continued:
<TABLE>
<CAPTION>

                                                                                 2001                2000
                                                                           -----------------    ----------------

 <c>
                Land and buildings on operating leases, net                     $ 8,923,289         $ 5,260,304
                Net investment in direct financing lease                                 --             792,921
                Cash                                                                107,183              51,798
                Receivables, less allowance for doubtful
                    accounts                                                          2,119              66,996
                Accrued rental income                                               207,980             297,196
                Other assets                                                          1,252                 533
                Liabilities                                                          54,184              33,082
                Partners' capital                                                 9,187,639           6,436,666
                Revenues                                                            622,988             700,747
                Provision for write-down of assets                                 (980,739 )                --
                Net income (loss)                                                  (688,116 )           583,366
</TABLE>

         The Partnership  recognized loss totaling $136,021, and income totaling
         $176,088 and $182,132  during the years ended December 31, 2001,  2000,
         and  1999  from  these  joint  ventures  and  the  properties  held  as
         tenants-in-common with affiliates.

6.       Restricted Cash:

         At December 31, 2001, a portion of the net sales proceeds from the sale
         of  the  property  in El  Dorado,  California,  was  being  held  in an
         interest-bearing  escrow  account  pending  the release of funds by the
         escrow agent to the Partnership.

<page>

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000, and 1999


7.       Allocations and Distributions:

         From inception  through  December 31, 1999,  distributions  of net cash
         flow,  as  defined  in  the  limited   partnership   agreement  of  the
         Partnership,  were made 95 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  was  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").

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

         From inception  through  December 31, 1999, net sales proceeds from the
         sale of a property not in liquidation of the Partnership generally were
         distributed  first to the limited  partners in an amount  sufficient to
         provide them with the return of their invested  capital  contributions,
         plus their cumulative Limited Partners' 8% Return. The general partners
         then  received  a return of their  capital  contributions  and,  to the
         extent  previously  subordinated and unpaid, a five percent interest in
         all net cash flow distributions.  Any remaining net sales proceeds were
         distributed 95 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,  was in general, allocated in the same manner as net sales
         proceeds are distributable.  Any loss was, in general, allocated first,
         on a pro rata basis to the  partners  with  positive  balances in their
         capital  accounts;  and thereafter,  95 percent to the limited partners
         and five percent to the general partners.

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000, and 1999


7.       Allocations and Distributions - Continued:

         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.

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

         During each of the years ended  December 31, 2001,  2000, and 1999, the
         Partnership   declared   distributions   to  the  limited  partners  of
         $2,400,000.  No distributions have been made to the general partners to
         date.
<page>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000, and 1999


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>

                                                                       2001            2000            1999
                                                                  ---------------  --------------  --------------

 <c>
               Net income for financial reporting purposes           $   969,196     $   673,138    $  1,839,269

               Depreciation for financial reporting purposes
                  less than depreciation for tax reporting purposes       37,122          50,099          20,470


               Amortization for financial reporting purposes
                  less than (in excess of) amortization for tax
                  reporting purposes                                        (848 )        (5,087 )         2,501

                 Direct financing leases recorded as operating
                   leases for tax reporting purposes                     35,649          35,010          38,951

                 Equity in earnings of unconsolidated joint
                    ventures for financial reporting purposes
                    less than (in excess of) equity in earnings of
                    unconsolidated joint  ventures for tax reporting
                    purposes                                             426,474            (747 )       (21,316 )

               Minority interest in timing differences of
                    consolidated joint venture                                --              --         (23,193 )

               Capitalization (deduction) of transaction costs
               for tax reporting purposes                                     --         (84,765 )        84,765

               Accrued rental income                                    (105,700 )      (162,072 )      (251,628 )

               Rents paid in advance                                     (14,806 )       (11,437 )        14,014

               Deferred rental income                                    (15,948 )       (12,239 )       (51,181 )

               Allowance for doubtful accounts                            31,981         206,448          46,855

               Gain on sale of assets for financial
                    reporting purposes less than (in excess of)
                    gain for tax reporting purposes                      (51,709 )      (327,494 )        74,630

               Gain and loss on sale of assets for financial
                    reporting purposes less than loss for tax
                    reporting purposes                                  (673,475 )            --              --

               Loss on dissolution for financial reporting
                    purposes in excess of loss on dissolution for
                    tax purposes                                              --              --         (14,866 )

               Provision for write-down of assets                        505,491       1,107,919         232,140

               Other                                                          --              --         (11,318 )
                                                                  ---------------  --------------  --------------

               Net income for federal income tax purposes           $  1,143,427     $ 1,468,773     $ 1,980,093
                                                                  ===============  ==============  ==============

</TABLE>
<page>
                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000, and 1999


9.       Related Party Transactions:

         One of the individual general partners, James M. Seneff, Jr., is one of
         the principal  shareholders of CNL Holdings,  Inc. The other individual
         general partner, Robert A. Bourne, serves as President and Treasurer of
         CNL Group,  Inc., a wholly owned  subsidiary of CNL Holdings,  Inc. CNL
         APF Partners,  LP (the  "Advisor") is a wholly owned  subsidiary of CNL
         American  Properties  Fund, Inc.  ("APF").  CNL Fund Advisors,  Inc., a
         majority owned subsidiary of CNL Financial Group,  Inc. until it merged
         with  and  into  APF  effective   September  1,  1999,  served  as  the
         Partnership's  advisor  until it  assigned  its rights and  obligations
         under a  management  agreement  with  the  Partnership  to the  Advisor
         effective   July  1,  2000.  The   individual   general   partners  are
         stockholders and directors of APF.

         The Advisor  provides  certain  services  relating to management of the
         Partnership and its properties pursuant to a management  agreement with
         the Partnership. In connection therewith, the Partnership has agreed to
         pay the Advisor 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
         the  Affiliates.  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 the  Affiliates  shall  determine.  The
         Partnership incurred management fees of $21,315,  $22,591, and $25,246,
         for the years ended December 31, 2001, 2000, and 1999, respectively.

         The Advisor is also entitled to receive a deferred,  subordinated  real
         estate disposition fee, payable upon the sale of one or more properties
         based on the lesser of one-half of a competitive real estate commission
         or  three  percent  of the  sales  price  if  the  Advisor  provides  a
         substantial amount of services in connection with the sale. However, if
         the sales  proceeds are reinvested in a replacement  property,  no such
         real estate  disposition  fees will be incurred until such  replacement
         property  is sold  and the net  sales  proceeds  are  distributed.  The
         payment  of the real  estate  disposition  fee is  subordinated  to the
         receipt  by the  limited  partners  of their  aggregate  18%  Preferred
         Return,  plus  their  adjusted  capital  contributions.   No  deferred,
         subordinated  real estate  disposition  fees have been  incurred  since
         inception.
<page>
                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000, and 1999


9.       Related Party Transactions - Continued:

         During the years ended  December 31, 2001,  2000, and 1999, the Advisor
         and its affiliates provided  accounting and administrative  services to
         the Partnership on a day-to-day basis,  including  services during 2000
         and  1999  relating  to  the  proposed  and  terminated   merger.   The
         Partnership  incurred  $189,320,  $77,769,  and $81,811,  for the years
         ended  December  31,  2001,  2000,  and  1999,  respectively,  for such
         services.

         During 2000, the  Partnership  acquired a property for a purchase price
         of  approximately  $1,630,200  from CNL BB Corp.,  an  affiliate of the
         general partners. CNL BB Corp. had purchased and temporarily held title
         to this property in order to facilitate the acquisition of the property
         by  the  Partnership.  The  purchase  price  paid  by  the  Partnership
         represented the costs incurred by CNL BB Corp. to acquire and carry the
         property, including closing costs.

         During 2001, the  Partnership  and CNL Income Fund VII, Ltd.  through a
         joint  venture  arrangement,  CNL  VII & XVII  Lincoln  Joint  Venture,
         acquired a Golden Corral  property  from CNL BB Corp.,  an affiliate of
         the general  partners,  for a total purchase  price of $1,740,374.  CNL
         Income Fund VII, Ltd. is a Florida limited partnership and an affiliate
         of the general  partners.  CNL BB Corp.  had purchased and  temporarily
         held title to this property in order to facilitate  the  acquisition of
         the property by the joint venture. The purchase price paid by the joint
         venture  represents  the costs  incurred by CNL BB Corp. to acquire and
         carry the property, including closing costs.

         In  December  2001,  the  Partnership  acquired a  property  located in
         Austin,  Texas from CNL  Funding  2001-A,  LP, for a purchase  price of
         approximately  $1,216,600  (see Note 3). CNL  Funding  2001-A,  LP is a
         Delaware limited  partnership and an affiliate of the General Partners.
         CNL Funding 2001-A, LP had purchased and temporarily held title to this
         property in order to facilitate the  acquisition of the property by the
         Partnership. The purchase price paid by the Partnership represented the
         costs  incurred  by CNL  Funding  2001-A,  LP to acquire  and carry the
         property, including closing costs.

         The amount due related  parties at December  31, 2001 and 2000  totaled
         $11,582 and $13,819, respectively.
<page>
                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000, and 1999


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 five properties held as
         tenants-in-common  with affiliates of the general partners) for each of
         the years ended December 31:
<TABLE>
<CAPTION>

                                                                 2001               2000              1999
                                                             --------------    ---------------    -------------

 <c>
         Golden Corral Corporation                                $555,303           $438,299         $439,790
         National Restaurant Enterprises, Inc.                     424,696            424,696          424,696
         Jack in the Box Inc. (formerly
              known as Foodmaker, Inc.) and
              Jack in the Box Eastern Division,
              L.P.                                                 324,397            349,491          349,491
         RTM Indianapolis and RTM
              Southwest Texas, Inc.                                264,878                N/A              N/A
         Phoenix Restaurant Group, Inc.
              (formerly known as
              DenAmerica Corp.)                                        N/A                N/A          386,065
</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  four   properties  held  as
         tenants-in-common  with affiliates of the general partners) for each of
         the years ended December 31:
<TABLE>
<CAPTION>

                                                            2001               2000                1999
                                                       ---------------    ---------------     ---------------

 <c>
          Golden Corral Family
               Steakhouse Restaurants                        $555,303          $ 438,299           $ 599,869
          Burger King                                         472,109            498,959             496,391
          Jack in the Box                                     324,397            349,491             349,491
          Arby's                                              282,266            282,551             283,884
</TABLE>
<page>

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000, and 1999


10.      Concentration of Credit Risk - Continued:

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

         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.

11.      Selected Quarterly Financial Data:

         The following table presents  selected  unaudited  quarterly  financial
         data for each full quarter during the years ended December 31, 2001 and
         2000:
<TABLE>
<CAPTION>

           2001 Quarter              First            Second            Third                Fourth             Year
       ----------------------    ---------------   -------------    ---------------      ---------------   ---------------

 <c>
       Revenues (1)                   $ 565,072       $ 540,359          $ 279,286            $ 500,658        $1,885,375
       Net Income                       300,532         198,750            314,746              155,168           969,196
       Net income per
           limited partner
           unit                            0.10            0.07               0.10                 0.05              0.32

         2000 Quarter                First            Second            Third                Fourth             Year
       ----------------------    ---------------   -------------    ---------------      ---------------   ---------------

       Revenues (1)                   $ 607,331       $ 682,258          $ 554,011            $ 628,279        $2,471,879
       Net Income                       170,269         243,827             (9,647    )         268,689           673,138
       Net income per
           limited partner
           unit                            0.06            0.08               0.00                 0.08              0.22
</TABLE>

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

         (2)      Revenues  have been  adjusted to  reclassify  any reversals of
                  accrued  rental income to provisions for write-down of assets.
                  This reclassification had no effect on total net income.

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000, and 1999


12.      Subsequent Events:

         In February 2002, a tenant,  Sybra,  Inc.,  filed for  bankruptcy.  The
         Partnership has continued  receiving  rental  payments  relating to the
         property in Zephyrhills, Florida, held with an affiliate of the general
         partners,  as  tenants-in-common.  While the tenant has not rejected or
         affirmed  the  lease,  there  can be no  assurance  that it will not be
         rejected in the future.

         In March  2002,  the  Partnership  entered  into an  agreement  with an
         unrelated third party to sell the Denny's property in Mesquite, Nevada.
         As of December 31, 2001,  the  Partnership  established a provision for
         write-down of assets related to the anticipated sale of this property.

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 Financial Group,  Inc.
and their affiliates, all of which are affiliates of the General Partners.

         James M. Seneff, Jr., age 55. Since 1971, Mr. Seneff has been active in
the  acquisition,  development,  and  management  of real estate  projects  and,
directly or through an  affiliated  entity,  has served as a general  partner or
co-venturer in over 100 real estate  ventures.  These ventures have involved the
financing,  acquisition,   construction,  and  leasing  of  restaurants,  office
buildings,  apartment  complexes,  hotels, and other real estate. Mr. Seneff has
served as Director and Chairman of the Board of CNL  American  Properties  Fund,
Inc. ("APF"),  a public,  unlisted real estate investment trust, since 1994. Mr.
Seneff served as Chief  Executive  Officer of APF from 1994 through August 1999,
and has served as Co-Chief  Executive  Officer of APF since  December  2000. Mr.
Seneff served as Chairman of the Board and Chief  Executive  Officer of CNL Fund
Advisors,  Inc.,  formerly  the  Partnership's  advisor,  until it merged with a
wholly-owned  subsidiary  of APF  in  September  1999,  and in  June  2000,  was
re-elected  to those  positions  of CNL Fund  Advisors,  Inc.  Mr.  Seneff  is a
principal stockholder of CNL Holdings, Inc., the parent company of CNL Financial
Group,  Inc., a diversified  real estate company,  and has served as a Director,
Chairman of the Board and Chief Executive  Officer of CNL Financial Group,  Inc.
since its formation in 1980. CNL Financial  Group,  Inc. is the parent  company,
either directly or indirectly through subsidiaries, of CNL Real Estate Services,
Inc., CNL Capital Markets, Inc., CNL Investment Company and CNL Securities Corp.
Mr. Seneff also serves as a Director,  Chairman of the Board and Chief Executive
Officer of CNL  Hospitality  Properties,  Inc., a public,  unlisted  real estate
investment trust, as well as, CNL Hospitality  Corp., its advisor.  In addition,
he serves as a Director,  Chairman of the Board and Chief  Executive  Officer of
CNL Retirement Properties, Inc., a public, unlisted real estate investment trust
and its advisor,  CNL Retirement Corp. Since 1992, Mr. Seneff has also served as
a Director,  Chairman of the Board and Chief Executive Officer of Commercial Net
Lease Realty,  Inc., a public real estate investment trust that is listed on the
New York Stock Exchange.  Mr. Seneff has also served as a Director,  Chairman of
the Board and Chief Executive  Officer of CNL Securities  Corp.  since 1979; CNL
Investment  Company  since  1990;  and  CNL  Institutional  Advisors,   Inc.,  a
registered investment advisor for pension plans, since 1990. Mr. Seneff formerly
served  as a  Director  of First  Union  National  Bank of  Florida,  N.A.,  and
currently serves as the Chairman of the Board of CNL Bank. Mr. Seneff previously
served on the Florida State Commission on Ethics and is a former member and past
Chairman of the State of Florida Investment  Advisory Council,  which recommends
to the Florida Board of Administration  investments for various Florida employee
retirement  funds.  The Florida  Board of  Administration,  Florida's  principal
investment advisory and money management agency, oversees the investment of more
than $60 billion of retirement funds. Mr. Seneff received his degree in Business
Administration from Florida State University in 1968.

         Robert A.  Bourne,  age 54. Mr.  Bourne has  participated  as a general
partner  or  co-venturer  in over  100  real  estate  ventures  involved  in the
financing,  acquisition,   construction,  and  leasing  of  restaurants,  office
buildings,  apartment  complexes,  hotels,  and other real estate. Mr. Bourne is
Director of the Board of Directors of APF. Mr. Bourne served as President of APF
from 1994 through  February 1999. He also served as Treasurer from February 1999
through  August 1999 and from May 1994 through  December 1994. He also served in
various  executive  positions with CNL Fund  Advisors,  Inc. prior to its merger
with a  wholly-owned  subsidiary of APF  including,  President from 1994 through
September 1997, and Director from 1994 through August 1999. Mr. Bourne serves as
President and Treasurer of CNL Financial Group, Inc.; Director, Vice Chairman of
the Board,  President  and  Treasurer  of CNL  Hospitality  Properties,  Inc., a
public,  unlisted  real estate  investment  trust;  as well as,  Director,  Vice
Chairman of the Board,  President and Treasurer of CNL  Hospitality  Corp.,  its
advisor. In addition, Mr. Bourne serves as Director, Vice Chairman of the Board,
President and Treasurer of CNL Retirement Properties,  Inc., a public,  unlisted
real  estate  investment  trust;  as well as, a Director,  Vice  Chairman of the
Board,  President and Treasurer of its advisor,  CNL Retirement Corp. Mr. Bourne
also serves as a Director of CNL Bank.  He has served as a Director  since 1992,
Vice Chairman of the Board since  February  1996,  Secretary and Treasurer  from
February 1996 through 1997, and President from July 1992 through  February 1996,
of Commercial  Net Lease  Realty,  Inc., a public real estate  investment  trust
listed on the New York Stock  Exchange.  Mr.  Bourne  also  serves as  Director,
President  and Treasurer for various  affiliates  of CNL Financial  Group,  Inc.
including,  CNL Investment  Company,  CNL Securities Corp. and CNL Institutional
Advisors,  Inc., a registered  investment  advisor for pension plans. Mr. Bourne
began his career as a certified public accountant employed by Coopers & Lybrand,
Certified  Public  Accountants,  from 1971 through  1978,  where he attained the
position  of Tax  Manager in 1975.  Mr.  Bourne  graduated  from  Florida  State
University in 1970 where he received a B.A. in Accounting, with honors.

         Curtis B.  McWilliams,  age 46. Mr.  McWilliams  has served as Co-Chief
Executive  Officer of APF since  December  2000 and  previously  served as Chief
Executive  Officer from  September  1999  through  December  2000.  Prior to the
acquisition of CNL Fund Advisors,  Inc., Mr.  McWilliams  served as President of
APF from  February  1999 until  September  1999.  From February 1998 to February
1999, he served as Executive  Vice President of APF. Mr.  McWilliams  joined CNL
Financial  Group,  Inc. in April 1997 and served as an Executive  Vice President
from October 1997 until September 1999. In addition,  Mr.  McWilliams  served as
President of CNL Fund Advisors, Inc. and CNL Financial Services, Inc. from April
1997 until the acquisition of such entities by wholly-owned  subsidiaries of APF
in September  1999.  From September 1983 through March 1997, Mr.  McWilliams was
employed by Merrill  Lynch & Co. The  majority of his career at Merrill  Lynch &
Co.  was in the  Investment  Banking  division  where he  served  as a  Managing
Director.  Mr.  McWilliams  received  a  B.S.E.  in  Chemical  Engineering  from
Princeton University in 1977 and a Master of Business Administration degree with
a concentration in finance from the University of Chicago in 1983.

         Steven  D.  Shackelford,  age  38.  Mr.  Shackelford  was  promoted  to
Executive Vice President of APF in June 2000. He served as Senior Vice President
from September 1999 until his promotion in June 2000. Mr. Shackelford has served
as Chief  Financial  Officer  since January 1997 and has served as Secretary and
Treasurer of APF since September 1999. He also served as Chief Financial Officer
of CNL Fund Advisors,  Inc. from September  1996 to September  1999.  From March
1995 to July 1996, Mr.  Shackelford  was a senior manager in the national office
of Price  Waterhouse LLP where he was responsible  for advising  foreign clients
seeking to raise capital and a public listing in the United States.  From August
1992 to March  1995,  he was a  manager  in the  Paris,  France  office of Price
Waterhouse, serving several multi-national clients. Mr. Shackelford was an audit
staff and  senior  from  1986 to 1992 in the  Orlando,  Florida  office of Price
Waterhouse.  Mr.  Shackelford  received a Bachelor of Arts degree in Accounting,
with honors, and a Master of Business  Administration  degree from Florida State
University and is a certified public accountant.


Item 11.  Executive Compensation

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


<page>
Item 12.  Security Ownership of Certain Beneficial Owners and Management

         As of March 15,  2002,  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 15, 2002,  the beneficial
ownership interests of the General Partners in the Registrant.
<TABLE>
<CAPTION>

                    Title of Class                           Name of Partner                 Percent of Class

 <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.



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, 2001,  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, 2001
---------------------------------      --------------------------------------      ------------------------------

 <c>
Reimbursement  to affiliates for       Operating  expenses are reimbursed at       Accounting                and
operating expenses                     the  lower  of  cost  or  90%  of the       admin-istrative     services:
                                       prevailing  rate at which  comparable       $189,320
                                       services  could have been obtained in
                                       the     same     geographic     area.
                                       Affiliates  of the  General  Partners
                                       from  time  to  time  incur   certain
                                       operating  expenses  on behalf of the
                                       Partnership     for     which     the
                                       Partnership       reimburses      the
                                       affiliates without interest.

Annual    management    fee   to       One  percent  of  the  sum  of  gross       $21,315
affiliates                             revenues   (excluding   noncash   and
                                       lease  accounting  adjustments)  from
                                       Properties   wholly   owned   by  the
                                       Partnership  plus  the  Partnership's
                                       allocable  share of gross revenues of
                                       joint    ventures    in   which   the
                                       Partnership  is  a  co-venturer.  The
                                       management   fee,   which   will  not
                                       exceed     competitive    fees    for
                                       comparable   services   in  the  same
                                       geographic  area,  may or may  not be
                                       taken,  in whole or in part as to any
                                       year,  in the sole  discretion of the
                                       affiliates.  All  of any  portion  of
                                       the  management  fee not  taken as to
                                       any  fiscal  year  shall be  deferred
                                       without  interest and may be taken in
                                       such   other   fiscal   year  as  the
                                       affiliates shall determine.


<page>
                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
         and Recipient                         Method of Computation                  Ended December 31, 2001
---------------------------------      --------------------------------------      ------------------------------

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

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

General   Partners'    deferred,       A deferred,  subordinated share equal       $-0-
subordinated       share      of       to  five   percent   of   Partnership
Part-nership  net sales proceeds       distributions   of  such  net   sales
from  a  sale  or  sales  not in       proceeds,   subordinated  to  certain
liquidation of the Partnership         minimum   returns   to  the   Limited
                                       Partners
<page>
                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
         and Recipient                         Method of Computation                  Ended December 31, 2001
---------------------------------      --------------------------------------      ------------------------------

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

</TABLE>

During  2001,  the  Partnership  and CNL Income Fund VII,  Ltd.  through a joint
venture  arrangement,  CNL VII & XVII Lincoln Joint  Venture,  acquired a Golden
Corral property from CNL BB Corp., an affiliate of the general  partners,  for a
total  purchase  price of  $1,740,374.  CNL Income  Fund VII,  Ltd. is a Florida
limited  partnership and an affiliate of the general partners.  CNL BB Corp. had
purchased and temporarily held title to this property in order to facilitate the
acquisition of the property by the joint venture. The purchase price paid by the
joint venture represents the costs incurred by CNL BB Corp. to acquire and carry
the property, including closing costs.

In December 2001, the Partnership  acquired a property located in Austin,  Texas
from CNL Funding 2001-A,  LP, for a purchase price of  approximately  $1,216,600
(see Note 3). CNL Funding 2001-A,  LP is a Delaware  limited  partnership and an
affiliate of the General  Partners.  CNL Funding  2001-A,  LP had  purchased and
temporarily  held title to this property in order to facilitate the  acquisition
of the property by the  Partnership.  The purchase price paid by the Partnership
represented  the costs incurred by CNL Funding  2001-A,  LP to acquire and carry
the property, including closing costs.


<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 Certified Public Accountants

                  Balance Sheets at December 31, 2001 and 2000

                  Statements of Income for the year ended December 31, 2001,
                  2000, and 1999

                  Statements of Partners' Capital for the year ended December
                  31, 2001, 2000 and 1999

                  Statements of Cash Flows for the year ended December 31, 2001,
                  2000, and 1999

                  Notes to Financial Statements

         2.  Financial Statement Schedules

                  Schedule II - Valuation and Qualifying Accounts for the years
                  ended December 31, 2001, 2000, and 1999

                  Schedule III - Real Estate and Accumulated Depreciation at
                  December 31, 2001

                  Notes to Schedule III - Real Estate and Accumulated
                  Depreciation at December 31, 2001

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

         3.  Exhibits

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                **10.12    Form of Cotenancy  Agreement with Unaffiliated Entity
                           (Filed as Exhibit  10.12 to Amendment  No. One to the
                           Registrant's Registration Statement on Form S-11, No.
                           33-90998, incorporated herein by reference.)
<page>
                **10.13    Form of Cotenancy  Agreement with  Affiliated  Entity
                           (Filed as Exhibit  10.13 to Amendment  No. One to the
                           Registrant's Registration Statement on Form S-11, No.
                           33-90998, incorporated herein by reference.)

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

         (b)      The Registrant  filed no reports on Form 8-K during the period
                  October 1, 2001 through  December 31, 2001.

         (c)      Not applicable.

         (d)      Other Financial Information.

                  The   Partnership  is  required  to  file  audited   financial
                  information of one of its tenants (Golden Corral  Corporation)
                  as a result of this tenant leasing more than 20 percent of the
                  Partnership's  total  assets for the year ended  December  31,
                  2001. Golden Corral  Corporation is a privately-held  company,
                  and  its  financial   information  is  not  available  to  the
                  Partnership to include in this filing.  The  Partnership  will
                  file this financial  information  under cover of a Form 10-K/A
                  as soon as it is available.


                 **previously filed

<page>

                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the  undersigned,  thereunto duly  authorized,  on the 26th day of
March, 2002.

                                        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.


         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

 <c>

/s/ Robert A. Bourne                     President,   Treasurer   and   Director            March 26, 2002
Robert A. Bourne                         (Principal   Financial  and  Accounting
                                         Officer)

/s/ James M. Seneff, Jr.                 Chief  Executive  Officer and  Director            March 26, 2002
James M. Seneff, Jr.                     (Principal Executive Officer)

</TABLE>



<page>

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

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                  Years Ended December 31, 2001, 2000, and 1999

<TABLE>
<CAPTION>

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

 <c>
  1999        Allowance for
                  doubtful
                  accounts (a)        $   1,283          $    --        $   48,138 (b)       $   -- (c)     $  1,283      $ 48,138
                                  ==============  ===============  ================    =============     ============  ============
  2000        Allowance for
                  doubtful
                  accounts (a)        $  48,138       $   35,807        $  249,776 (b)    $   3,966 (c)     $ 27,434     $ 302,321

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


(a)    Deducted from receivables and accrued rental income.

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

(c)    Amounts written off as uncollectible.


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

                  SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                 December 31, 2001
<TABLE>
<CAPTION>

                                                                          Costs Capitalized
                                                                            Subsequent to
                                                   Initial Cost              Acquisition
                                            --------------------------  --------------------
                              Encum-                      Buildings and  Improve-    Carrying
                             brances           Land        Improvements   ments      Costs
                            ----------      ------------  ------------  -----------  -------

 <c>
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            -        -

    Baker's Square:
      Wilmette, Illinois        -               832,288       827,640            -        -

    Burger King Restaurants:
      Harvey, Illinois          -               489,341       734,010            -
      Chicago Ridge, Illinois   -               771,965             -      699,556        -
      Lyons, Illinois           -               887,767             -      597,381        -

    Denny's Restaurants:
      Mesquite, Nevada          -               373,078             -      670,452        -
      Pensacola, Florida        -               305,509       670,990            -        -

    Fazoli's Restaurant:
      Warner Robins, Georgia    -               300,482             -      421,898        -

    Golden Corral Family
      Steakhouse Restaurants:
          Orange Park, Florida  -               711,838     1,162,406            -        -
          Aiken, South Carolina -g)             508,790             -      862,571        -
          Weatherford, Texas (g)-               345,926             -      691,222        -

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

    Taco Cabana Restaurants:
      Austin, Texas             -               523,988       692,610            -        -

    Wendy's Old Fashioned
      Hamburgers Restaurants:
          Knoxville, Tennessee  -               332,003             -      489,610        -
          Livingston, Tennessee -               261,701             -            -        -
                                            ------------  ------------  -----------  -------

                                             $8,212,604    $5,116,042   $5,503,157        -
                                            ============  ============  ===========  =======




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

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

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

                                                      -      $629,847     $455,575        -
                                            ============  ============  ===========  =======

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

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

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

        Black-eyed Pea Restaurant:
            Corpus Christi, Texa- (f) (h)      $715,052      $726,004            -        -
                                            ============  ============  ===========  =======

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

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





                                                                          Costs Capitalized
                                                                            Subsequent to
                                                    Initial Cost             Acquisition
                                            --------------------------  --------------------
                              Encum-                      Buildings and  Improve-    Carrying
                             brances           Land        Improvements   ments      Costs
                                            ------------  ------------  -----------  -------
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            -        -
                                            ============  ============  ===========  =======

Property of Joint Venture
  in Which the Partnership has
  a 30.94% Interest and has
  Invested in Under an
  Operating Lease:

      Burger KinghRestaurantaurant:
            Ocean Shores, WA (i)-              $351,015      $789,560            -        -
                                            ============  ============  ===========  =======

Property in which the
   Partnership has a 24%
   Interest as Tenants-in-
   Common and has invested
   in Under an Operating Lease:

        Arby's Restaurant:
            Zephyrhills, FL     -              $260,146      $441,434            -        -
                                            ============  ============  ===========  =======

Property of Joint Venture in
   Which the Partnership has a
   86% Interest and has
   Invested in Under an
   Operating Lease:

       Golden Corral Restaurant:
            Lincoln, Nebraska   -              $485,390    $1,254,984            -        -
                                            ============  ============  ===========  =======

Property in which the
   Partnership has a 25%
   Interest as Tenants-in-
   Common and has invested in
    =Under an Operating Lease:

        Bennigan's Restaurant:
            Waldorf, Maryland   -              $968,984    $1,311,515            -        -
                                            ============  ============  ===========  =======





     Net Cost Basis 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 structionAcquired       Computed
-------------  ------------  ------------  -----------  -------  ---------    -------------





    $242,759            (d)     $242,759           (e)   1995     03/96           (e)
     348,245       470,577       818,822       86,788    1996     06/96           (c)
     296,025       557,809       853,834       96,432    1996     10/96           (c)


     832,288       827,640     1,659,928       52,877    2000     01/00           (c)


     489,341       734,010     1,223,351      142,428    1996     03/96           (c)
     771,965       699,556     1,471,521      131,478    1996     03/96           (c)
     887,767       597,381     1,485,148       92,576    1997     11/96           (c)


     277,709       500,907       778,616        6,816    1996     12/95           (e)
     305,509       670,990       976,499      120,855    1996     08/96           (c)


     300,482       421,898       722,380       72,551    1996     08/96           (c)



     711,838     1,162,406     1,874,244      225,661    1996     03/96           (c)
     508,790       862,571     1,371,361      159,735    1996     04/96           (c)
     345,926       691,222     1,037,148      122,819    1996     03/96           (c)


     324,970       509,982       834,952       90,924    1996     05/96           (c)
     355,929       560,485       916,414       98,547    1996     07/96           (c)


     523,988       692,610     1,216,598        1,924    1990     12/01           (c)



     332,003       489,610       821,613       88,488    1996     05/96           (c)
     261,701            (d)      261,701           (e)   1996     06/96           (e)
-------------  ------------  ------------  -----------

  $8,117,235   $10,449,654   $18,56,889   $1,590,899
=============  ============  ============  ===========











  Net Cost Basis 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 structionAcquired       Computed
-------------  ------------  ------------  -----------  -------  ---------    -------------





           -            (d)           (d)          (e)   1995     03/96           (e)



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

           -
=============








    $377,800      $587,700      $965,500     $102,718    1996     10/96           (c)
=============  ============  ============  ===========








    $584,525      $614,141    $1,198,666     $114,819    1992     01/97           (c)
=============  ============  ============  ===========








    $355,594      $517,030      $872,624      $84,924    1970     01/97           (c)
=============  ============  ============  ===========












     Net Cost Basis 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 structionAcquired       Computed
-------------  ------------  ------------  -----------  -------  ---------    -------------







    $297,295      $482,914      $780,209      $77,256    1997     02/97           (c)
=============  ============  ============  ===========








    $189,452      $328,444      $517,896      $44,766    1997     09/97           (c)
=============  ============  ============  ===========








    $120,916      $281,310      $402,226      $15,122    1998     01/99           (c)
=============  ============  ============  ===========








    $260,146      $441,434      $701,580      $43,447    1990     01/99           (c)
=============  ============  ============  ===========








    $485,390    $1,254,984    $1,740,374      $31,375    2000     04/01           (c)
=============  ============  ============  ===========








    $968,984    $1,311,515    $2,280,499      $21,858    2001     07/01           (c)
=============  ============  ============  ===========


</TABLE>
                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

        NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 2001


(a)      Transactions in real estate and accumulated  depreciation  during 2001,
         2000, and 1999 are summarized as follows:
<TABLE>
<CAPTION>

                                                                                              Accumulated
                                                                              Cost            Depreciation
                                                                         ----------------   -----------------


 <c>
            Properties the Partnership has Invested
              in Under Operating Leases:

                 Balance, December 31, 1998                                 $ 21,523,945         $   875,817
                 Dispositions                                                   (974,793 )                --
                 Depreciation expense                                                 --             372,148
                                                                         ----------------   -----------------

                 Balance, December 31, 1999                                   20,549,152           1,247,965
                 Acquisitions                                                  1,659,927                  --
                 Dispositions                                                 (1,470,189 )           (69,579 )
                 Provision for write-down of assets                             (565,070 )                --
                 Depreciation expense                                                 --             391,244
                                                                         ----------------   -----------------

                 Balance, December 31, 2000                                   20,173,820           1,569,630
                 Acquisitions                                                  1,216,598                  --
                 Dispositions                                                 (3,189,492 )          (321,421 )
                 Reclassification from direct financing lease                    670,452                  --
                 Provision for write-down of assets                             (304,489 )                --
                 Depreciation expense                                                 --             342,690
                                                                         ----------------   -----------------

            Balance, December 31, 2001                                      $ 18,566,889        $  1,590,899
                                                                         ================   =================

            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, 1998                                  $   965,500         $    43,948
                 Depreciation expense                                                 --              19,590
                                                                         ----------------   -----------------

                 Balance, December 31, 1999                                      965,500              63,538
                 Depreciation expense                                                 --              19,590
                                                                         ----------------   -----------------

                 Balance, December 31, 2000                                      965,500              83,128
                 Depreciation expense                                                 --              19,590
                                                                         ----------------   -----------------

                 Balance, December 31, 2001                                  $   965,500         $   102,718
                                                                         ================   =================
<page>

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

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

                                December 31, 2001

                                                                                                Accumulated
                                                                               Cost            Depreciation
                                                                          ----------------    ------------------

            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, 1998                                  $  1,441,056         $    46,648
                 Depreciation expense                                                  --              24,200
                                                                          ----------------    ----------------

                 Balance, December 31, 1999                                     1,441,056              70,848
                 Depreciation expense                                                  --              24,201
                                                                          ----------------    ----------------

                 Balance, December 31, 2000                                     1,441,056              95,049
                 Provision for write-down of assets (h)                          (242,390 )                --
                 Depreciation expense                                                  --              19,770
                                                                          ----------------    ----------------

                 Balance, December 31, 2001                                  $  1,198,666         $   114,819
                                                                          ================    ================

            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, 1998                                   $   872,624         $    33,222
                 Depreciation expense                                                  --              17,234
                                                                          ----------------    ----------------

                 Balance, December 31, 1999                                       872,624              50,456
                 Depreciation expense                                                  --              17,234
                                                                          ----------------    ----------------

                 Balance, December 31, 2000                                       872,624              67,690
                 Depreciation expense                                                  --              17,234
                                                                          ----------------    ----------------

                 Balance, December 31, 2001                                   $   872,624         $    84,924
                                                                          ================    ================
<page>
                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

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

                                December 31, 2001


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

                 Balance, December 31, 1998                                   $   780,209         $    28,963
                 Depreciation expense                                                  --              16,097
                                                                          ----------------    ----------------

                 Balance, December 31, 1999                                       780,209              45,060
                 Depreciation expense                                                  --              16,098
                                                                          ----------------    ----------------

                 Balance, December 31, 2000                                       780,209              61,158
                 Depreciation expense                                                  --              16,098
                                                                          ----------------    ----------------

                 Balance, December 31, 2001                                   $   780,209         $    77,256
                                                                          ================    ================

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

                 Balance, December 31, 1998                                   $   517,896         $    11,920
                 Depreciation expense                                                  --              10,948
                                                                          ----------------    ----------------

                 Balance, December 31, 1999                                       517,896              22,868
                 Depreciation expense                                                  --              10,949
                                                                          ----------------    ----------------

                 Balance, December 31, 2000                                       517,896              33,817
                 Depreciation expense                                                  --              10,949
                                                                          ----------------    ----------------

                 Balance, December 31, 2001                                   $   517,896         $    44,766
                                                                          ================    ================
<page>
                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

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

                                December 31, 2001


                                                                                                Accumulated
                                                                               Cost            Depreciation
                                                                          ----------------    ----------------
            Property of Joint Venture in which the Partnership has
              a 30.94% Interest and has Invested in Under an
              Operating Lease:

                 Balance, December 31, 1998                                      $     --            $     --
                 Acquisitions                                                     351,015                  --
                 Depreciation expense (e)                                              --                  --
                                                                          ----------------    ----------------

                 Balance, December 31, 1999                                       351,015                  --
                 Depreciation expense (e)                                              --                  --
                                                                          ----------------    ----------------

                 Balance, December 31, 2000                                       351,015                  --
                 Reclassification from direct financing lease                     789,560                  --
                 Provision for write-down of assets                              (738,349 )                --
                 Depreciation expense                                                  --              15,122
                                                                          ----------------    ----------------

                 Balance, December 31, 2001                                   $   402,226         $    15,122
                                                                          ================    ================

            Property in which the Partnership has a 24% Interest
              as Tenants-in-Common and has Invested in Under an
              Operating Lease:

                 Balance, December 31, 1998                                      $     --            $     --
                 Acquisition                                                      701,580                  --
                 Depreciation expense                                                  --              13,532
                                                                          ----------------    ----------------

                 Balance, December 31, 1999                                       701,580              13,532
                 Depreciation expense                                                  --              15,201
                                                                          ----------------    ----------------

                 Balance, December 31, 2000                                       701,580              28,733
                 Depreciation expense                                                  --              14,714
                                                                          ----------------    ----------------

                 Balance, December 31, 2001                                   $   701,580         $    43,447
                                                                          ================    ================

            Property of Joint Venture in which the Partnership has a
              86% Interest and has Invested in Under an Operating
              Lease:

                 Balance, December 31, 2000                                      $     --            $     --
                 Acquisition                                                    1,740,374                  --
                 Depreciation expense                                                  --              31,375
                                                                          ----------------    ----------------

                 Balance, December 31, 2001                                  $  1,740,374         $    31,375
                                                                          ================    ================

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

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

                                December 31, 2001

                                                                                                Accumulated
                                                                               Cost            Depreciation
                                                                          ----------------    ----------------
            Property in which the Partnership has a 25% Interest as
              Tenants-in-Common and has Invested in Under an
              Operating Lease:

                 Balance, December 31, 2000                                      $     --            $     --
                 Acquisitions                                                   2,280,499                  --
                 Depreciation expense                                                  --              21,858
                                                                          ----------------    ----------------

                 Balance, December 31, 2001                                  $  2,280,499         $    21,858
                                                                          ================    ================
</TABLE>

(b)      As of December 31, 2001, the aggregate cost of the Properties  owned by
         the  Partnership  and the joint venture for federal income tax purposes
         was $19,984,630 and  $10,459,655,  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)      Certain components of the lease relating to land and building have been
         recorded as a direct  financing lease.  Accordingly,  costs relating to
         these components of this lease are not shown.

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

(f)      During the 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,
         investment in joint ventures and other assets at December 31, 2001.

(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)      The  undepreciated  cost of the Property in Corpus  Christi,  Texas, in
         which the Partnership owns an interest,  as  tenants-in-common  with an
         affiliate of the General  Partners,  was written down to net realizable
         value due to an impairment in value.  The  Partnership  recognized  the
         impairment  by recording a provision  for  write-down  of assets in the
         amount of $242,390 at December 31, 2001. The provision  represented the
         difference between the Property's  carrying value and the estimated net
         realizable  value of the Property at December 31, 2001. The cost of the
         Property  presented  on this  schedule  is the net  amount at which the
         Property was carried at December 31, 2001,  including the provision for
         write-down of assets.
<page>
                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

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

                                December 31, 2001


(i)      The  undepreciated  cost of the Property in Ocean  Shores,  Washington,
         owned by Ocean Shores Joint Venture, was written down to net realizable
         value due to an impairment in value.  The  Partnership  recognized  the
         impairment  by recording a provision  for  write-down  of assets in the
         amount of $738,349 at December 31, 2001. The impairment represented the
         difference between the Property's  carrying value and the estimated net
         realizable  value of the Property at December 31, 2001. The cost of the
         Property  presented  on this  schedule  is the net  amount at which the
         Property was carried at December 31, 2001,  including the provision for
         write-down of assets.