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, 2000

                                       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 0-24095

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

                  Florida                  59-3295394
         (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. [x]

         Aggregate market value of the voting stock held by nonaffiliates of the
registrant:   The  registrant   registered  an  offering  of  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 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 XVIII, 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  20, 1996,  the
Partnership offered for sale up to $35,000,000 of limited partnership  interests
(the  "Units")  (3,500,000  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 February 6, 1998, at which date the
maximum  offering  proceeds of $35,000,000  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").  As of December  31,  1998,  net
proceeds to the  Partnership  from its  offering of Units,  after  deduction  of
organizational and offering  expenses,  totalled  $30,810,000.  During 1998, the
Partnership had invested approximately $29,859,000 of the proceeds to acquire 24
Properties  (which  included one Property  owned by a joint venture in which the
Partnership  is  a  co-venturer)   and  to  pay  acquisition  fees  and  certain
acquisition  expenses.  In February  1999, the  Partnership  invested in a joint
venture  arrangement,  CNL Portsmouth  Joint  Venture,  with CNL Income Fund XI,
Ltd., an affiliate of the General Partners to hold and purchase one Property and
used  the  remaining   amounts  to  establish  a  working  capital  reserve  for
Partnership  purposes.  In December 1999, the  Partnership  sold one Property in
Atlanta,  Georgia.  In June  2000,  the  Partnership  reinvested  the net  sales
proceeds  from the sale of the Property in Atlanta,  Georgia in a joint  venture
arrangement,  TGIF Pittsburgh Joint Venture, with CNL Income Fund VII, Ltd., CNL
Income Fund XV, Ltd.,  and CNL Income Fund XVI,  Ltd.,  each an affiliate of the
General  Partners,  to purchase one Property in  Homestead,  Pennsylvania.  As a
result of the above transactions, as of December 31, 2000, the Partnership owned
25  Properties,  including 22 wholly  owned  Properties  and  interests in three
Properties owned by joint ventures in which the Partnership is a co-venturer. In
January 2001, the Partnership  sold a portion of its interest in TGIF Pittsburgh
Joint Venture to CNL Income Fund VII, Ltd., a Florida limited partnership and an
affiliate of the General Partners,  for approximately  $500,000. The Partnership
intends to use the net sales proceeds to pay other  liabilities  and to meet the
Partnership's  working  capital and other needs.  The  Properties  are generally
leased 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.

Description of Leases

         The leases of the Properties  provide for initial terms ranging from 15
to 20 years (the average being 19 years) and expire  between 2012 and 2020.  All
leases are generally on a triple-net basis, with the lessees responsible for all
repairs and  maintenance,  property taxes,  insurance and utilities.  The leases
provide  for minimum  base  annual  rental  payments  (payable in equal  monthly
installments)  ranging from approximately  $58,400 to $259,900.  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 provide for two to five five-year renewal options
subject to the same terms and conditions as the initial lease.  Lessees of 17 of
the  Partnership's  25 Properties also have been granted options to purchase the
Properties after a specified  portion of the lease term has elapsed.  The option
purchase  price is  equal to the  Partnership's  original  cost of the  Property
(including  acquisition  costs),  plus a specified  percentage or the Property's
fair market value at the time the  purchase  option is  exercised,  whichever is
greater.  Fair  market  value  will be  determined  through an  appraisal  by an
independent appraisal firm.

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

         In October 1998, the tenants of three Boston Market properties,  Boston
Chicken,  Inc.,  Finest  Foodservice,  L.L.C.,  and WMJ Texas,  Inc.,  filed for
bankruptcy, rejected one of their three leases and ceased making rental payments
to the Partnership on the rejected lease. In June 2000, the two remaining leases
were rejected and the tenant ceased making rental payments on these  Properties.
The  Partnership  will not  recognize  any rental and  earned  income  from this
Property  until a new tenant for the Property is located,  or until the Property
is sold  and the  proceeds  from  such  sale  are  reinvested  in an  additional
Property.  The lost revenues  resulting from the leases that were  rejected,  as
described  above,  could have an adverse  affect on the results of operations of
the  Partnership  if the  Partnership  is unable to re-lease  this Property in a
timely manner.  The General Partners are currently seeking either new tenants or
purchasers for the rejected Properties.

         In June 2000,  the tenant of the Property in San Antonio,  Texas closed
the store and ceased restaurant operations. The Partnership is currently seeking
a new tenant or purchaser for this Property.

         In October 2000, the  Partnership  terminated the lease with the tenant
of the Property in Raleigh,  North Carolina,  due to financial  difficulties the
tenant  was  experiencing.   The  Partnership  received  a  termination  fee  in
consideration  for the termination.  The Partnership is currently  seeking a new
tenant or purchaser for this Property.

Major Tenants

         During 2000, two lessees of the Partnership,  Golden Corral Corporation
and  Jack in the Box  Inc.,  each  contributed  more  than  ten  percent  of the
Partnership's  total rental and earned income (including the Partnership's share
of total rental and earned income from joint ventures). As of December 31, 2000,
Golden Corral  Corporation  and Jack in the Box, Inc. were each the lessee under
leases relating to four restaurants. It is anticipated that based on the minimum
rental payments required by the leases, that each of these lessees will continue
to  contribute  more than ten percent of the  Partnership's  total rental income
rental and earned income (including the Partnership's  share of total rental and
earned income from joint ventures) in 2001. In addition,  two Restaurant Chains,
Golden Corral Family Steakhouse  Restaurants ("Golden Corral"),  and Jack in the
Box, each accounted for more than ten percent of the Partnership's  total rental
income  rental and earned income  (including  the  Partnership's  share of total
rental  and  earned  income  from  joint  ventures)  for  2000.  In 2001,  it is
anticipated that these two Restaurant  Chains each will contribute more than ten
percent  of  the   Partnership's   rental  and  earned  income   (including  the
Partnership's  share of total rental and earned  income from joint  ventures) to
which the Partnership is entitled under the terms of the leases.  Any failure of
such  lessees  or  Restaurant  Chains  could  materially  adversely  affect  the
Partnership's  income if the  Partnership is not able to re-lease the Properties
in a timely manner.  As of December 31, 2000, Golden Corral  Corporation  leased
Properties with an aggregate carrying value in excess of 20 percent of the total
assets of the Partnership.

Joint Venture Arrangements

         In  August  1998,  the   Partnership   entered  into  a  joint  venture
arrangement,  Columbus  Joint  Venture,  with CNL Income Fund XII,  Ltd. and CNL
Income Fund XVI, Ltd., affiliates of the General Partners, to construct and hold
one Property. Each of the affiliates is a limited partnership organized pursuant
to the laws of the State of Florida.  The joint venture arrangement provides for
the  Partnership  and its  joint  venture  partners  to share in all  costs  and
benefits  associated  in the  joint  venture  in  proportion  to each  partner's
percentage interest in the joint venture.  The Partnership has a 39.93% interest
in Columbus Joint Venture.  The Partnership  and its joint venture  partners are
also  jointly  and  severally  liable  for  all  debts,  obligations  and  other
liabilities of the joint venture.

         In addition,  in February  1999, the  Partnership  entered into a joint
venture  arrangement,  CNL Portsmouth  Joint  Venture,  with CNL Income Fund XI,
Ltd., an affiliate of the General Partners,  to purchase and hold one restaurant
Property.  The affiliate is a limited partnership organized pursuant to the laws
of  the  State  of  Florida.  The  joint  venture  agreement  provides  for  the
Partnership  and its joint  venture  partner 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 57.2%  interest  in the
profits and losses of the joint venture.

         In addition, in June 2000, the Partnership entered into a joint venture
arrangement,  TGIF Pittsburgh Joint Venture, with CNL Income Fund VII, Ltd., CNL
Income Fund XV, Ltd. and CNL Income Fund XVI,  Ltd.,  affiliates  of the General
Partners, to purchase and hold one restaurant Property.  Each of the affiliate's
is a limited partnership organized pursuant to the laws of the State of Florida.
The joint venture  agreement  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.  As of
December 31, 2000,  the  Partnership  owned a 39.5%  interest in the profits and
losses of the joint venture.  In January 2001, the Partnership sold a portion of
its interest in TGIF  Pittsburgh  Joint Venture to CNL Income Fund VII,  Ltd., a
Florida  limited  partnership  and an  affiliate  of the General  Partners,  for
approximately $500,000. The Partnership intends to use the net sales proceeds to
pay other  liabilities and to meet the  Partnership's  working capital and other
needs.

         Each  joint  venture  has an initial  term of 20 years  and,  after the
expiration of the initial term,  continues in existence from year to year unless
terminated  at the  option  of any of the  joint  venturers  or by an  event  of
dissolution.  Events  of  dissolution  include  the  bankruptcy,  insolvency  or
termination  of any  joint  venturer,  sale of the  Property  owned by the joint
venture and mutual  agreement of the Partnership and its joint venture  partners
to dissolve the joint venture.

         The Partnership  shares  management  control equally with affiliates of
the  General  Partners  for  each  of the  joint  ventures.  The  joint  venture
agreements  restrict  each  venturer's  ability to sell,  transfer or assign its
joint venture  interest  without first offering it for sale to its joint venture
partners,  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 Columbus Joint Venture, CNL Portsmouth
Joint Venture and TGIF Pittsburgh  Joint Venture are distributed  39.93%,  57.2%
and 39.5%,  respectively,  to the  Partnership and the balance is distributed to
the  respective  joint  venture  partners  in  accordance  with  its  respective
percentage interest in the joint venture. Any liquidation proceeds, after paying
joint  venture  debts  and  liabilities  and  funding  reserves  for  contingent
liabilities,  will be  distributed  first to the  joint  venture  partners  with
positive  capital  account  balances in proportion  to such balances  until such
balances  equal  zero,  and  thereafter  in  proportion  to each  joint  venture
partner's percentage interest in the joint venture.

         The use of joint venture  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
arrangements also provides the Partnership with increased diversification of its
portfolio among a greater number of properties.

Management Services

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

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

Competition

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

Employees

         The  Partnership   has  no  employees.   The  officers  of  CNL  Realty
Corporation  and the  officers and  employees of APF, the parent  company of CNL
Fund Advisors, Inc., perform certain services for the Partnership.  In addition,
the General  Partners have  available to them the resources and expertise of the
officers and employees of CNL 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, 2000, the Partnership owned 25 Properties. Of the 25
Properties,  22 are owned by the  Partnership  in fee simple and three are owned
through  joint  venture  arrangements.  See  Item 1.  Business  - Joint  Venture
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. As of December 31, 2000, the Partnership's  Property sites ranged
from  approximately  24,400 to 120,400  square feet depending upon building size
and  local  demographic  factors.  Sites  purchased  by the  Partnership  are in
locations zoned for commercial use which have been reviewed for traffic patterns
and volume.

         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

               Arizona                              1
               California                           2
               Florida                              2
               Illinois                             1
               Kentucky                             1
               Maryland                             1
               Minnesota                            1
               North Carolina                       3
               Nevada                               1
               New York                             1
               Ohio                                 2
               Pennsylvania                         1
               Tennessee                            1
               Texas                                6
               Virginia                             1
                                              --------------
               TOTAL PROPERTIES                    25
                                              ==============

         Buildings.  The Properties  owned by the Partnership as of December 31,
2000,  include a building that is one of a Restaurant  Chain's approved designs.
The  buildings   generally  are  rectangular   and   constructed   from  various
combinations of stucco,  steel, wood, brick and tile.  Building sizes range from
approximately  2,100 to 9,700 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,  2000,  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, 2000, the aggregate cost of the Properties  owned by
the  Partnership  and  joint  ventures  for  federal  income  tax  purposes  was
$26,932,200 and $3,925,143, respectively.

         The following table lists the Properties owned by the Partnership as of
December 31, 2000 by Restaurant Chain.

                Restaurant Chain                     Number of Properties

                Arby's                                         2
                Bennigan's                                     1
                Boston Market                                  4
                Burger King                                    1
                Chevy's Fresh Mex                              1
                Golden Corral                                  4
                Ground Round                                   1
                IHOP                                           2
                Jack in the Box                                4
                NI's International Buffet                      1
                On the Border                                  1
                Taco Bell                                      1
                TGIF                                           1
                Wendy's                                        1
                                                         --------------
                TOTAL PROPERTIES                              25
                                                         ==============

         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.


<PAGE>


         At December 31, 2000,  1999, 1998, 1997 and 1996 the Properties were 80
percent,  96 percent,  96 percent,  100  percent and 100 percent  occupied.  The
following  is a schedule of the average  rent per Property for each of the years
ended December 31:

<TABLE>
<CAPTION>
<S><C>


                                     2000              1999              1998               1997             1996
                                 -------------     -------------    ---------------     --------------     ----------

   Rental Revenues (1)            $ 2,888,408       $ 3,141,240        $ 2,953,285         $1,290,621         $1,374
   Properties (3)                          20                23                 24                 22              2
   Average Rent per
       Property                     $ 144,420         $ 136,576          $ 123,054          $  58,665          $ 687

</TABLE>


(1)      Rental income  includes the  Partnership's  share of rental income from
         the  Properties  owned  through  joint  venture  arrangements.   Rental
         revenues have been adjusted,  as applicable,  for any amounts for which
         the Partnership has established an allowance for doubtful accounts.

(2)      Operations  did not commence until October 12, 1996, the date following
         the  date on  which  the  Partnership  received  the  minimum  offering
         proceeds of  $1,500,000,  and such  proceeds were released from escrow.
         The Partnership acquired two Properties in December 1996, of which only
         one was operational as of December 31, 1996.

(3)      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, 2000 for the next ten years and thereafter.

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

              2001                             --                       --                      --
              2002                             --                       --                      --
              2003                             --                       --                      --
              2004                             --                       --                      --
              2005                             --                       --                      --
              2006                             --                       --                      --
              2007                             --                       --                      --
              2008                             --                       --                      --
              2009                             --                       --                      --
              2010                             --                       --                      --
              Thereafter                       20                3,136,500                 100.00%
                                        ----------            -------------           -------------
              Total (1)                        20              $ 3,136,500                 100.00%
                                        ==========            =============           =============
</TABLE>



(1)      Excludes five Properties which were vacant at December 31, 2000.

         Leases  with Major  Tenants.  The terms of each of the leases  with the
Partnership's  major  tenants,  as of December 31, 2000 (See Item 1.  Business -
Major  Tenants),  are  substantially  the  same as  those  described  in Item 1.
Business - Description of Leases.

         Golden Corral  Corporation leases four Golden Corral  restaurants.  The
initial  term of each  lease is 15  years  (expiring  in 2012 to  2013)  and the
average  minimum  base  annual  rent is  approximately  $164,400  (ranging  from
approximately $156,700 to $178,200).

         Jack in the Box  Inc.  leases  four  Jack in the Box  restaurants.  The
initial  term of each  lease is 18 years  (expiring  in  2015)  and the  average
minimum base annual rent is approximately  $112,100 (ranging from  approximately
$77,900 to $132,200).
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, 2001,  there were 1,559 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
         2000,  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  had the right to prohibit  transfers  of
         Units.  The price paid for any Unit  transferred  pursuant  to the Plan
         through December 31, 2000 range from $8.57 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 2000 and 1999 other than
pursuant to the Plan, net of commissions

<TABLE>
<CAPTION>
<S><C>

                                             2000                                        1999(1)
                             --------------------------------------     ------------------------------------------
                               High         Low          Average           High           Low          Average
                             ---------    ---------    ------------     -----------     ---------    -------------

     First Quarter              $9.30       $ 7.45         $  8.73             (2)           (2)              (2)
     Second Quarter              6.65         6.65            6.65             (2)           (2)              (2)
     Third Quarter               7.27         7.27            7.27         $ 10.00       $ 10.00          $ 10.00
     Fourth Quarter              6.47         6.47            6.47            9.01          9.01             9.01

</TABLE>


(1)      A total of 10,290 and 6,400 Units were transferred  other than pursuant
         to  the  Plan  for  the  years  ended   December  31,  2000  and  1999,
         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 the  years  ended  December  31,  2000 and  1999,  the  Partnership
declared cash distributions of $2,800,000 and $2,799,998,  respectively,  to the
Limited  Partners.  No  amounts  distributed  to  partners  for the years  ended
December  31,  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.  No distributions have
been made to the General  Partners to date.  As  indicated  in the chart  below,
these   distributions   were  declared  following  the  close  of  each  of  the
Partnership's  calendar  quarters.  These amounts include monthly  distributions
made in arrears for the Limited Partners electing to receive such  distributions
on this basis.


<PAGE>

<TABLE>
<CAPTION>
<S><C>

                    Quarter Ended                   2000                        1999
                 --------------------        --------------------       ---------------------

                 March 31                           $    700,000               $     699,999
                 June 30                                 700,000                     699,999
                 September 30                            700,000                     700,000
                 December 31                             700,000                     700,000

</TABLE>


         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

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


<TABLE>
<CAPTION>
<S><C>


                                    Year Ended        Year Ended      Year Ended      Year Ended       Year Ended
                                   December 31,      December 31,    December 31,    December 31,     December 31,
                                       2000              1999            1998            1997             1996
                                  ----------------  --------------- --------------- ---------------- ---------------

    Revenues (1)                     $  2,781,113      $ 3,192,371     $ 3,097,757      $ 1,453,242      $   31,614
    Net income (4)(5)(6)                1,117,197        2,515,356       2,302,322        1,154,760          26,910
    Cash distributions
        declared (2)                    2,800,000        2,799,998       2,657,764        1,310,885          57,846
    Net income per Unit                       .32              .72             .66              .51             .05
    Cash distributions
        declared per Unit (2)                 .80              .80             .76              .57             .11
    Weighted average number
        of Limited Partner
        Unitsoutstanding (3)            3,500,000        3,500,000       3,495,278        2,279,801         503,436



                                       2000              1999            1998            1997             1996
                                  ----------------  --------------- --------------- ---------------- ----------------
    At December 31:
        Total assets                $  29,385,297      $30,866,006     $31,112,617      $31,807,255     $ 7,240,324
        Total partners'                28,573,997       29,983,855      30,268,497       29,846,580       6,996,213
    capital

</TABLE>


(1)      Revenues  include equity in earnings of joint ventures and  adjustments
         to  accrued  rental  income due to the  tenants  of certain  Properties
         terminating their leases.

(2)      Approximately  50  percent,   10  percent,   and  13  percent  of  cash
         distributions ($0.40, $0.08, and $0.06 per Unit,  respectively) for the
         years ended December 31, 2000, 1999, and 1998, respectively, represents
         a return of capital in accordance  with generally  accepted  accounting
         principles ("GAAP").  Cash distributions treated as a return of capital
         on a GAAP basis represent the amount of cash distributions in excess of
         accumulated net income on a GAAP basis. The Partnership has not treated
         such  amounts as a return of capital for  purposes of  calculating  the
         Limited Partners' return on their invested capital contributions.

(3)      Represents the weighted average number of Units outstanding  during the
         period the Partnership was operational.

(4)      Net income for the year ended December 31, 1998, includes $197,466 from
         provision  for loss on assets.  Net income for the year ended  December
         31, 2000, includes $580,221 from provision for loss on assets.

(5)      Net income for the year ended December 31, 1999,  include  $46,300 from
         gains on sale of land and building.

(6)      Net income for the year ended December 31, 2000, includes $100,000 from
         lease termination income.


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
restaurants  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, 2000, the  Partnership  owned 25 Properties,
either directly or through joint venture arrangements.

Capital Resources

         On September  20, 1996,  the  Partnership  commenced an offering to the
public of up to 3,500,000 Units of limited  partnership  interest  pursuant to a
registration  statement  on Form  S-11  under  the  Securities  Act of 1933,  as
amended,  effective  August  11,  1995.  The  Partnership's  offering  of  Units
terminated  on  February  6,  1998,  at  which  time  the  maximum  proceeds  of
$35,000,000 (3,500,000 Units) had been received from investors. The Partnership,
therefore, will derive no additional capital resources from the offering.

         As of December  31,  1998,  net  proceeds to the  Partnership  from its
offering of Units,  after  deduction of  organizational  and offering  expenses,
totalled  $30,810,000.  During  1997,  the  Partnership  acquired 20  additional
Properties  (one of which was under  construction  as of December  31, 1997) and
completed construction of a Property under construction as of December 31, 1996.
During 1998,  the  Partnership  completed  construction  of the  Property  under
construction  as of December 31,  1997,  acquired  one  additional  Property and
entered into one joint venture arrangement, Columbus Joint Venture. During 1999,
the Partnership  used the remaining net proceeds to enter into one joint venture
arrangement,  CNL Portsmouth  Joint Venture,  and to establish a working capital
reserve for Partnership purposes. In addition, during 1999, the Partnership sold
one  Property  in  Atlanta,  Georgia,  as  described  below.  During  2000,  the
Partnership  used the net  proceeds  from the sale of the  Property  in Atlanta,
Georgia to enter  into one joint  venture  arrangement,  TGIF  Pittsburgh  Joint
Venture in Homestead,  Pennsylvania as described below. As a result of the above
transactions,  as of December 31,  2000,  the  Partnership  had invested the net
proceeds in 25 Properties, including three Properties owned by joint ventures in
which  the  Partnership  is a  co-venturer,  and to  pay  acquisition  fees  and
miscellaneous acquisition expenses. As of December 31, 2000, the Partnership had
paid $1,575,000 in acquisition fees to an affiliate of the General Partners.

         In  August  1998,  the   Partnership   entered  into  a  joint  venture
arrangement,  Columbus  Joint  Venture,  with CNL Income Fund XII,  Ltd. and CNL
Income Fund XVI, Ltd., each a Florida  limited  Partnership and affiliate of the
General  Partners,  to own and lease one  restaurant  property.  During the year
ended  December 31, 1999,  the  Partnership  made  additional  contributions  of
approximately  $195,700 to Columbus  Joint Venture to pay property  construction
costs.  As of December 31, 2000, the  Partnership  had a total  contribution  of
approximately  $362,000 to the joint venture and owned a 39.93% interest in this
joint venture.

         In  February  1999,  the  Partnership  entered  into  a  joint  venture
arrangement, CNL Portsmouth Joint Venture, with CNL Income Fund XI, Ltd., each a
Florida limited  Partnership and affiliate of the General  Partners,  to own and
lease one  restaurant  property.  As of December 31, 2000, the  Partnership  had
contributed  approximately  $330,500  to the  joint  venture  and  owned a 57.2%
interest in this joint venture.

         In  December  1999,  the  Partnership  sold its  Property  in  Atlanta,
Georgia,  and  received net sales  proceeds of $688,997,  resulting in a gain of
$46,300 for financial reporting purposes.  This Property was originally acquired
by the Partnership in 1997, and had a cost of approximately $617,600,  excluding
acquisition  fees  and  miscellaneous   acquisition  expenses;   therefore,  the
Partnership  sold the  Property  for  approximately  $71,400  in  excess  of its
original purchase price. In June 2000, the Partnership  reinvested the net sales
proceeds from this sale into a joint venture arrangement,  TGIF Pittsburgh Joint
Venture,  with CNL Income  Fund VII,  Ltd.,  CNL Income Fund XV,  Ltd.,  and CNL
Income Fund XVI, Ltd., each a Florida  Limited  Partnership and affiliate of the
General Partners,  to own and lease one restaurant property.  As of December 31,
2000, the  Partnership  had  contributed  approximately  $1,002,000 to the joint
venture and owned a 39.5% interest in this joint  venture.  In January 2001, the
Partnership  sold a portion of its interest in TGIF Pittsburgh  Joint Venture to
CNL Income Fund VII, Ltd., a Florida limited partnership and an affiliate of the
General Partners, for approximately $500,000. The Partnership intends to use the
net  sales  proceeds  to pay  other  liabilities  and to meet the  Partnership's
working capital and other needs.

         Currently,  the  Partnership's  primary  source of capital is cash from
operations  (which  includes cash received from tenants,  interest  received and
distributions  from  joint  ventures,  less cash paid for  expenses).  Cash from
operations  was  $2,310,051,  $2,797,040,  and  $2,831,738,  for the years ended
December  31,  2000,  1999,  and 1998,  respectively.  The decrease in cash from
operations  for 2000, as compared to 1999,  was primarily a result of changes in
income and  expenses as  described  in "Results of  Operations"  below,  and the
decrease in cash from  operations for 1999, as compared to 1998, was primarily a
result of changes in the Partnership's working capital.

         None of the Properties owned or to be acquired by the  Partnership,  or
the  joint  venture  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 or 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.  Affiliates of the General  Partners from
time to time incur certain  expenses on behalf of the  Partnership for which the
Partnership reimburses the affiliates without interest.

         Currently,  rental income from the Partnership's Properties is 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 thirty day maturity date,  pending the
Partnership's  use  of  such  funds  to  pay  Partnership  expenses  or to  make
distributions  to the  partners.  At December  31,  2000,  the  Partnership  had
$479,603 invested in such short-term  investments,  as compared to $1,282,113 at
December 31, 1999. The decrease cash and cash equivalents was primarily a result
of the Partnership  investing in joint venture, TGIF Pittsburgh Joint Venture in
June 2000, as described  above.  As of December 31, 2000,  the average  interest
rate  earned on the  rental  income  deposited  in demand  deposit  accounts  at
commercial  banks was  approximately  4.01%  annually.  The funds  remaining  at
December 31, 2000 will be used to pay distributions and other liabilities and to
meet the Partnership's working capital and other needs.

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 generally  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 believe that the Partnership has sufficient working capital reserves at
this  time.  In  addition,  because  all of the  leases  for  the  Partnership's
Properties are generally 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 cash from  operations,  and for the years ended December
31, 2000  anticipated  future cash from  operations,  the  Partnership  declared
distributions to the Limited Partners of $2,800,000, $2,799,998, and $2,657,764,
for the years ended  December  31,  2000,  1999,  and 1998,  respectively.  This
represents  distributions  of $0.80,  $0.80,  and $0.76 per Unit,  for the years
ended  December 31,  2000,  1999 and 1998,  respectively,  based on the weighted
average  number of Units  outstanding  during  the period  the  Partnership  was
operational.  No  distributions  were made to the General Partners for the years
ended  December  31,  2000,  1999,  or 1998.  No  amounts  distributed  or to be
distributed to the Limited  Partners for the years ended December 31, 2000, 1999
or 1998, 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 the Limited  Partners on a
quarterly  basis,  although  some Limited  Partners,  in  accordance  with their
election, receive monthly distributions, for an annual fee.

         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 year ended December 31, 2000.

         During the year ended  December  31,  1998,  affiliates  of the General
Partners incurred on behalf of the Partnership  $35,842 for certain  acquisition
expenses.  As of December 31, 2000 and 1999,  the  Partnership  owed $53,181 and
$36,737,  respectively, to related parties for operating expenses and accounting
and  administrative  services.  As  of  March  15,  2001,  the  Partnership  had
reimbursed  the  affiliates  all  such  amounts.  Other  liabilities,  including
distributions  payable,  decreased to $758,119 at December 31, 2000, as compared
to $845,414 at December 31,  1999.  Liabilities  at December  31,  2000,  to the
extent they exceed cash and cash  equivalents at December 31, 2000, will be paid
from future cash from  operations or from  anticipated  future General  Partners
contributions.

Long-Term Liquidity

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

Results of Operations

         During  1998,  the  Partnership   owned  and  leased  23  wholly  owned
Properties.  During  1999,  the  Partnership  owned and  leased 25 wholly  owned
Properties  (including  one Property  which was sold in 1999).  During 2000, the
Partnership  owned and leased 22 wholly owned  Properties.  In addition,  during
1998,  1999, and 2000, the  Partnership was a co-venturer in one, two, and three
joint  ventures,  respectively,  they each owned and leased one Property.  As of
December 31, 2000, the  Partnership  owned,  either  directly or through a joint
venture  arrangement,  25 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
$58,400 to $259,900.  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 a further description of the Partnership's leases and Properties,
see Item 1. Business - Leases and Item 2. Properties.

         During  the  years  ended  December  31,  2000,  1999,  and  1998,  the
Partnership  earned $2,632,478,  $3,071,229,  and $2,953,285,  respectively,  in
rental  income from  operating  leases  (net of  adjustments  to accrued  rental
income) and earned income from direct financing  leases.  The decrease in rental
and earned  income  during 2000,  as compared to 1999,  and the increase  during
1999,  as compared to 1998,  was  partially  offset by, a decrease in rental and
earned  income  due  to the  fact  that  the  tenants  of  three  Boston  Market
Properties,  Boston Chicken,  Inc.,  Finest  Foodservice,  L.L.C. and WMJ Texas,
Inc.,  filed for bankruptcy in 1998.  During 1998, one of these tenants rejected
the lease  relating to one of the  Partnership's  Properties  and ceased  making
rental  payments to the Partnership  for this lease.  The Partnership  continued
receiving rental payments relating to the leases that were not rejected. In June
2000,  the other two  tenants  rejected  the leases  relating  to two  remaining
Properties and ceased making rental  payments.  In conjunction with the rejected
leases during 2000, the Partnership  reversed  $92,314 of accrued rental income.
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 Partnership will not
recognize any rental and earned income from these  Properties  until new tenants
for the  Properties  are  located,  or  until  the  Properties  are sold and the
proceeds  from such sales are  reinvested  in  additional  Properties.  The lost
revenues resulting from the rejected leases, could have an adverse affect on the
results of  operations  of the  Partnership  if the  Partnership  is not able to
re-lease these Properties in a timely manner. The General Partners are currently
seeking either new tenants or purchasers for the rejected Properties.

         Rental and earned  income  also  decreased  during  2000 as compared to
1999, by approximately $78,400, due to the fact that in June 2000, the tenant of
the  Property  in San  Antonio,  Texas  defaulted  under the terms of its lease,
vacated the Property and discontinued  making rental payments.  As a result, the
Partnership  reclassified  the asset  from net  investment  in direct  financing
leases to land and buildings on operating  leases.  In accordance with Statement
of  Financial   Accounting  standards  No.  13,  "Accounting  for  Leases,"  the
Partnership  recorded  the  reclassified  assets at the lower of original  cost,
present fair value, or present  carrying value. No loss on termination of direct
financing  leases was recorded.  During 2000,  the  Partnership  established  an
allowance  for doubtful  accounts of  approximately  $92,600 for past due rental
amounts  relating to this Property.  No such allowance were recorded during 1999
or 1998. The Partnership is currently seeking a new tenant or purchaser for this
Property.  The Partnership will not recognize any rental income relating to this
Property until a new tenant for the Property is located or until the Property is
sold and the proceeds from such sale are reinvested in an additional Property.

         Rental and earned  income  also  decreased  during  2000 as compared to
1999,  by  approximately  $57,200,  due to the fact that in  October  2000,  the
Partnership  terminated  the lease with the tenant of the  Property  in Raleigh,
North Carolina, due to financial  difficulties the tenant was experiencing.  The
Partnership  is currently  seeking a new tenant or purchaser for this  Property.
The  Partnership  will not recognize any rental income relating to this Property
until a new tenant for the Property is located or until the Property is sold and
the proceeds from such sale are reinvested in an additional Property.

         The decrease in rental  income during 2000,  was also  partially due to
the sale of the Property in Atlanta,  Georgia,  in December  1999.  The decrease
during 2000 and the increase during 1999, was also partially attributable to the
fact that during  1999,  the  Partnership  collected  and  recognized  as income
approximately  $47,400  for a portion of past due rental  amounts  for which the
Partnership  had  previously  established  an allowance  for  doubtful  accounts
relating to the Property in Stow, Ohio.

         During the years ended December 31, 2000 and 1999, the Partnership also
earned $112,863 and $61,656, respectively,  attributable to net income earned by
joint ventures in which the  Partnership  is a co-venturer.  The increase in net
income earned by joint  ventures  during 2000 and 1999,  each as compared to the
previous year, was primarily  attributable to the Partnership entering into TGIF
Pittsburgh  Joint Venture during 2000; CNL Portsmouth  Joint Venture in February
1999;  and  Columbus  Joint  Venture  during 1998,  each as  described  above in
"Capital Resources."

         During  the  year  ended   December  31,  2000,   two  lessees  of  the
Partnership,   Golden  Corral  Corporation  and  Jack  in  the  Box  Inc.,  each
contributed more than ten percent of the  Partnership's  total rental and earned
income (including the Partnership's share of rental and earned income from joint
ventures).  As of December 31, 2000,  Golden Corral  Corporation and Jack in the
Box Inc. were each the lessee under leases relating to four  restaurants.  It is
anticipated  that, based on the minimum rental payments  required by the leases,
these  lessees  each will  continue to  contribute  more than ten percent of the
Partnership's  total rental and earned income (including the Partnership's share
of rental and earned income from joint  ventures) in 2001.  In addition,  during
the year ended December 31, 2000, two Restaurant Chains,  Golden Corral and Jack
in the Box each accounted for more than ten percent of the  Partnership's  total
rental and earned income (including the Partnership's share of rental and earned
income  from  joint  ventures).  In  2001,  it is  anticipated  that  these  two
Restaurant Chains each will continue to account for more than ten percent of the
total rental and earned income (including the Partnership's  share of rental and
earned income from joint  ventures) to which the  Partnership  is entitled under
the terms of the leases.  Any failure of such lessees or Restaurant Chains could
materially  adversely affect the Partnership's  income if the Properties are not
re-leased in a timely manner.

         During  the  years  ended  December  31,  2000,   1999  and  1998,  the
Partnership earned $35,772, $59,486 and $144,472,  respectively, in interest and
other  income.  The decrease in interest and other income  during 2000 and 1999,
each as  compared  to the  previous  year,  was  primarily  attributable  to the
decrease in the amount of funds invested in cash and cash equivalents due to the
acquisition  of an  additional  Property  in 1999  and the  investment  in joint
venture arrangements during 2000 and 1999.

         Operating expenses,  including  depreciation and amortization  expense,
were $825,877,  $723,315 and $597,969  during the years ended December 31, 2000,
1999 and 1998, respectively.  The increase in operating expenses during 2000, as
compared to 1999,  was  partially  attributable  to an increase in  depreciation
expense as the result of the fact that the Properties  acquired during 1999, and
the fact that during 2000, the  Partnership  reclassified  the lease relating to
the  Property in San  Antonio,  Texas from direct  financing  lease to operating
lease.

         Operating  expenses  were higher  during 1999,  as compared to 2000 and
1998,  primarily due to the amount of transaction costs the Partnership incurred
relating to the  General  Partners  retaining  financial  and legal  advisors to
assist them in evaluating and  negotiating  the proposed and  terminated  Merger
with APF, as described below in "Termination of Merger."

         The increase in operating  expenses for 2000 and 1999, each as compared
to the previous year,  was also  partially due to the fact that the  Partnership
incurred  expenses such as insurance,  repairs and  maintenance  and real estate
taxes relating to the five vacant  Properties  described  above. The Partnership
will  continue  to incur  such costs  until the  Partnership  finds  replacement
tenants or purchasers for these Properties.

         As a  result  of the  sale of the  Property  in  Atlanta,  Georgia,  as
described above in "Capital  Resources,"  the  Partnership  recognized a gain of
$46,300 for financial  reporting  purposes for the year ended December 31, 1999.
No Properties were sold during 2000 or 1998.

         During the year ended December 31, 1998, the Partnership established an
allowance for loss on land of $197,466 for financial reporting purposes relating
to the  Property in  Minnetonka,  Minnesota.  The tenant of this  Boston  Market
Property  declared  bankruptcy and rejected the lease relating to this Property.
The loss  represented  the difference  between the Property's  carrying value at
December 31, 1998 and the estimated of net realizable  value.  No such allowance
was established during the years ended December 31, 2000 and 1999.

         During the year ended  December 31, 2000,  the  Partnership  recorded a
provision  for loss on the  building  in the amount of  $299,849  for  financial
reporting purposes relating to the Property in San Antonio, Texas. The allowance
represents  the  difference  between the carrying value of the net investment in
direct  financing  lease relating to the Property.  The tenants of this Property
closed the store and ceased operation during 2000. The allowance represented the
difference  between the carrying  value of the  Properties at December 31, 2000,
and the estimated net realizable value for this Property.  No such allowance was
established during the year ended December 31, 1999 and 1998.

         During the year  ended  December  31,  2000 and 1998,  the  Partnership
established   an  allowance  for  loss  on  assets  of  $553,317  and  $197,466,
respectively,  for financial  reporting  purposes  relating to the Properties in
Timonium,  Maryland;  Raleigh,  North Carolina; and Minnetonka,  Minnesota.  The
tenant  of the  Timonium  and  Minnetonka  Properties  declared  bankruptcy  and
rejected the leases relating to these Properties.  The tenant of the San Antonio
Property defaulted under the terms of its lease, vacated the Property and ceased
restaurant   operations.   The  loss  represented  the  difference  between  the
Properties'  carrying  values and the estimated net  realizable  value.  No such
allowance was established during the year ended December 31, 1999.

         The lease termination  refund to tenant of $84,873 during 2000, was due
to lease  termination  negotiations  related to the 1999 sale of the Property in
Atlanta,  Georgia,  as  described in "Capital  Resources."  No such amounts were
incurred during 1999 or 1998. The Partnership does not anticipate  incurring any
additional costs related to the sale of this Property.

         The  Partnership's  leases  are  on  a  triple-net  basis  and  contain
provisions  that  management  believes  will  mitigate  the  adverse  effect  of
inflation.  Such provisions  include clauses requiring the payment of percentage
rent based on certain  restaurant sales above a specified level and/or automatic
increases  in  base  rent at  specified  times  during  the  term of the  lease.
Management  expects that increases in restaurant  sales volumes due to inflation
and real sales growth  should  result in an increase in rental income over time.
Continued  inflation also may cause capital  appreciation  of the  Partnership's
Properties.  Inflation and changing  prices,  however,  also may have an adverse
impact on the sales of the restaurants and on potential capital  appreciation of
the Properties.

         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 results of operations.

         In June 1998, the Financial Accounting Standards Board issued Statement
of  Financial   Accounting   Standards  No.  133,   "Accounting  for  Derivative
Instruments and Hedging  Activities." The Statement  establishes  accounting and
reporting  standards for derivative  instruments,  including certain  derivative
instruments,   embedded  in  other  contracts   (collectively   referred  to  as
derivatives),  and for hedging activities. The Statement requires that an entity
recognize all  derivatives  as either assets or liabilities in the balance sheet
and  measure  those  instruments  at fair  value.  In June 1999,  the  Financial
Accounting  Standards Board issued Statement of Financial  Accounting  Standards
No.  137,  "Accounting  for  Derivative  Instruments  and Hedging  Activities  -
Deferral of the Effective  Date of FASB  Statement No. 133, an Amendment of FASB
Statement No. 133." FAS 137 deferred the effective date of FAS 133 for one year.
FAS 133,  as amended,  is now  effective  for all fiscal  quarters of all fiscal
years  beginning  after  June  15,  2000.  The  Partnership  has  reviewed  both
statements and has determined  that both FAS 133 and FAS 137 do not apply to the
Partnership as of December 31, 2000.

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


<PAGE>




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

                                    CONTENTS









                                                                    Page

Report of Independent Certified Public Accountants                   16

Financial Statements:

     Balance Sheets                                                  17

     Statements of Income                                            18

     Statements of Partners' Capital                                 19

     Statements of Cash Flows                                     20-21

     Notes to Financial Statements                                22-39





<PAGE>








               Report of Independent Certified Public Accountants





To the Partners
CNL Income Fund XVIII, Ltd.


In our opinion,  the financial  statements  listed in the index  appearing under
item 14(a)(1) present fairly, in all material  respects,  the financial position
of CNL Income Fund XVIII,  Ltd. (a Florida limited  partnership) at December 31,
2000 and 1999,  and the results of its operations and its cash flows for each of
the three  years in the  period  ended  December  31,  2000 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  financial  statement
schedules  are  the   responsibility  of  the  Partnership's   management;   our
responsibility  is to  express  an opinion  on these  financial  statements  and
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 2, 2001




<PAGE>



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

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
<S><C>
                                                                                         December 31,
                                                                                 2000                    1999
                                                                          -------------------      ------------------
                            ASSETS

  Land and buildings on operating leases, less
       accumulated depreciation and allowance for
       loss on assets                                                           $ 22,421,426             $22,514,872
  Net investment in direct financing leases                                        3,984,296               5,209,759
  Investment in joint ventures                                                     1,762,821                 688,113
  Cash and cash equivalents                                                          479,603               1,282,113
  Restricted cash                                                                         --                 690,885
  Receivables, less allowance for doubtful    accounts of
  $123,993 and $11,172,
       respectively                                                                      346                  28,037
  Prepaid expenses                                                                    22,399                   9,341
  Accrued rental income                                                              440,148                 383,725
  Other assets                                                                         1,313                  59,161
                                                                          -------------------      ------------------

                                                                                $ 29,112,352             $30,866,006
                                                                          ===================      ==================

               LIABILITIES AND PARTNERS' CAPITAL

  Accounts payable                                                                $   33,559              $   86,294
  Accrued and Escrowed real estate taxes payable                                      11,788                      --
  Distributions payable                                                              700,000                 700,000
  Due to related parties                                                              53,181                  36,737
  Rents paid in advance                                                                7,474                  13,969
  Deferred rental income                                                               5,298                  45,151
                                                                          -------------------      ------------------
           Total liabilities                                                         811,300                 882,151

  Partners' capital                                                               28,301,052              29,983,855
                                                                          -------------------      ------------------

                                                                                $ 29,112,352             $30,866,006
                                                                          ===================      ==================
See accompanying notes to financial statements.
</TABLE>



<PAGE>


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

                              STATEMENTS OF INCOME

<TABLE>
<CAPTION>
<S><C>

                                                                                Year Ended December 31,
                                                                      2000                1999               1998
                                                                ------------------   ---------------    ---------------
Revenues:
     Rental income from operating leases                             $  2,327,142       $ 2,444,692        $ 2,396,215
     Adjustments to accrued rental income                                (140,012  )             --                 --
     Earned income from direct financing leases                           445,348           626,537            557,070
     Interest and other income                                             35,772            59,486            144,472
                                                                ------------------   ---------------    ---------------
                                                                        2,668,250         3,130,715          3,097,757
                                                                ------------------   ---------------    ---------------
Expenses:
     General operating and administrative                                 229,811           142,554            145,661
     Bad debt expense                                                       2,973                --                 --
     Professional services                                                 35,304            61,288             25,670
     Management fees to related party                                      27,875            30,235             28,038
     Real estate taxes                                                     87,603                --                 --
     State and other taxes                                                 17,604            21,983              8,605
     Depreciation and amortization                                        397,175           392,521            374,473
     Transaction costs                                                     27,532            74,734             15,522
                                                                ------------------   ---------------    ---------------
                                                                          825,877           723,315            597,969
                                                                ------------------   ---------------    ---------------

Income Before Equity in Earnings of Joint Ventures,
     Gain on Sale of Asset, Provision for Loss on
     Assets, Termination Refund to Tenant and Lease
     Termination Income                                                 1,842,373         2,407,400          2,499,788

Equity in Earnings of Joint Ventures                                      112,863            61,656                 --

Gain on Sale of Asset                                                          --            46,300                 --

Provision for Loss on Assets                                             (853,166  )             --           (197,466 )

Termination Refund to Tenant                                              (84,873  )             --                 --

Lease Termination Income                                                  100,000                --                 --
                                                                ------------------   ---------------    ---------------

Net Income                                                           $  1,117,197       $ 2,515,356        $ 2,302,322
                                                                ==================   ===============    ===============

Allocation of Net Income:
     General partners                                                    $     --        $   (3,309  )      $   (1,582 )
     Limited partners                                                   1,117,197         2,518,665          2,303,904
                                                                ------------------   ---------------    ---------------

                                                                     $  1,117,197       $ 2,515,356        $ 2,302,322
                                                                ==================   ===============    ===============

Net Income Per Limited Partner Unit                                    $     0.32         $    0.72          $    0.66
                                                                ==================   ===============    ===============

Weighted Average Number of
     Limited Partner Units Outstanding                                  3,500,000         3,500,000          3,495,278
                                                                ==================   ===============    ===============
</TABLE>

See accompanying notes to financial statements.

<PAGE>




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

                         STATEMENTS OF PARTNERS' CAPITAL

                  Years Ended December 31, 2000, 1999 and 1998

<TABLE>
<CAPTION>
<S><C>
                                                  General Partners
                                       ---------------------------------------
                                                                    Accumulated
                                               Contributions          Earnings
                                              -----------------   -----------------

Balance, December 31, 1997                               1,000              (1,428 )

    Contributions from limited partners                     --                  --
    Distributions to limited partners
       ($0.76 per limited partner unit)                     --                  --
    Syndication costs                                       --                  --
    Net income                                              --              (1,582 )
                                              -----------------   -----------------

Balance, December 31, 1998                               1,000              (3,010 )

    Distributions to limited partners
       ($0.80 per limited partner unit)                     --                  --
    Net income                                              --              (3,309 )
                                              -----------------   -----------------

Balance, December 31, 1999                         $     1,000         $    (6,319 )

    Contributions from limited partners
    Distributions to limited partners
       ($0.80 per limited partner unit)                     --                  --
    Net income                                              --                  --
                                              -----------------   -----------------

Balance, December 31, 2000                         $     1,000         $    (6,319 )
                                              =================   =================

                       Limited Partners
  -----------------------------------------------------------------------
                                         Accumulated       Syndication
 Contributions      Distributions         Earnings            Costs            Total
-----------------   ---------------    ----------------   ---------------   -------------

      34,145,759        (1,368,731 )         1,183,098        (4,113,118 )    29,846,580

         854,241                --                  --                --         854,241

              --        (2,657,764 )                --                --      (2,657,764 )
              --                --                  --           (76,882 )       (76,882 )
              --                --           2,303,904                --       2,302,322
-----------------   ---------------    ----------------   ---------------   -------------

      35,000,000        (4,026,495 )         3,487,002        (4,190,000 )    30,268,497


              --        (2,799,998 )                --                --      (2,799,998 )
              --                --           2,518,665                --       2,515,356
-----------------   ---------------    ----------------   ---------------   -------------

   $  35,000,000      $ (6,826,493 )      $  6,005,667      $ (4,190,000 )   $29,983,855



              --        (2,800,000 )                --                --      (2,800,000 )
              --                --           1,117,197                --       1,117,197
-----------------   ---------------    ----------------   ---------------   -------------

   $  35,000,000      $ (9,626,493 )      $  7,122,864      $ (4,190,000 )   $28,301,052
=================   ===============    ================   ===============   =============

</TABLE>







                           CNL INCOME FUND XVIII, LTD.
                         (A Florida Limited Partnership)
                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
<S><C>


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

Increase (Decrease) in Cash and Cash Equivalents:

      Cash Flows from Operating Activities:
         Cash received from tenants                                $ 2,738,192       $ 2,930,415        $ 2,884,620
         Distributions from joint ventures                              97,264            60,076              5,630
         Interest received                                              41,937            53,448            141,408
         Cash paid for expenses                                       (482,469 )        (246,899 )         (199,920 )
         Lease termination refund                                      (84,873 )              --                 --
                                                                ---------------    --------------    ---------------

             Net cash provided by operating activities               2,310,051         2,797,040          2,831,738
                                                                ---------------    --------------    ---------------

      Cash Flows from Investing Activities:
         Proceeds from sale of asset                                        --           688,997                 --
         Additions to land and buildings on operating
             leases                                                         --           (25,792 )       (3,134,046 )
         Investment in direct financing leases                              --                --            (12,945 )
         Investment in joint ventures                               (1,001,558 )        (526,138 )         (166,025 )
         Decrease (increase) in restricted cash                        688,997          (688,997 )               --
         Other                                                              --              (117 )               --
                                                                ---------------    --------------    ---------------

             Net cash used in investing activities                    (312,561 )        (552,047 )       (3,313,016 )
                                                                ---------------    --------------    ---------------

      Cash Flows from Financing Activities:
         Reimbursement of acquisition and syndication
             costs paid by related parties on behalf of
             the Partnership                                                --            (2,495 )          (37,135 )
         Contributions from limited partners                                --                --            854,241
         Distributions to limited partners                          (2,800,000 )      (2,799,998 )       (2,468,400 )
         Payment of syndication costs                                       --                --           (161,142 )
         Other                                                              --                --            (10,000 )
                                                                ---------------    --------------    ---------------

             Net cash used in financing activities                  (2,800,000 )      (2,802,493 )       (1,822,436 )
                                                                ---------------    --------------    ---------------

Net Decrease in Cash and Cash Equivalents                             (802,510 )        (557,500 )       (2,303,714 )

Cash and Cash Equivalents at Beginning of Year                       1,282,113         1,839,613          4,143,327
                                                                ---------------    --------------    ---------------

Cash and Cash Equivalents at End of Year                            $  479,603       $ 1,282,113        $ 1,839,613
                                                                ===============    ==============    ===============
See accompanying notes to financial statements.
</TABLE>




<PAGE>


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

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


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

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

      Net income                                                 $  1,117,197         $  2,515,356       $  2,302,322
                                                               ---------------     ----------------    ---------------
      Adjustments to  reconcile  net income to net cash  provided  by  operating
         activities:
             Depreciation                                             395,565              386,932            372,473
             Amortization                                               1,610                5,589              2,000
             Bad debt expense                                          (2,973 )
             Equity in earnings of joint ventures net
                of distributions                                      (15,599 )             (1,580 )            5,630
             Provision for loss on assets                             853,166                   --            197,466
             Decrease in net investment in direct
                financing leases                                       70,178               38,556             81,211
             Decrease (increase) in receivables                        32,552              (29,925 )           68,000
             Increase in prepaid expenses                             (13,058 )             (5,688 )           (3,653 )
             Increase in accrued rental income                        (56,423 )           (152,726 )         (119,132 )
             Increase in other assets                                  (1,313 )                 --                 --
             Increase  (decrease)  in  accounts  payable
and                                                                   (40,947 )             83,736              2,102
                accrued expenses
             Increase   in  due  to   related   parties,
excluding
                acquisition costs paid on behalf of the                16,444                6,457             27,257
                Partnership
             Increase (decrease) in rents paid in
                advance                                                (6,495 )              6,618            (20,926 )
             Increase   (decrease)  in  deferred  rental              (39,853 )            (56,285 )          (83,012 )
income
                                                               ---------------     ----------------    ---------------
                   Total adjustments                                1,192,854              281,684            529,416
                                                               ---------------     ----------------    ---------------

Net Cash Provided by Operating Activities                        $  2,310,051         $  2,797,040       $  2,831,738
                                                               ===============     ================    ===============

Supplemental Schedule of Non-Cash Investing and
   Financing Activities:

      Related  parties  paid  certain   acquisition   costs  on  behalf  of  the
         Partnership as follows:
             Acquisition costs                                       $     --             $     --        $    35,842
                                                               ---------------     ----------------    ---------------
                                                                     $     --             $     --        $    35,842
                                                               ===============     ================    ===============

      Distributions declared and unpaid at December 31            $   700,000          $   700,000        $   700,000
                                                               ===============     ================    ===============
See accompanying notes to financial statements.

</TABLE>

<PAGE>




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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2000, 1999, and 1998


1.       Significant Accounting Policies:
         -------------------------------

         Organization and Nature of Business - CNL Income Fund XVIII,  Ltd. (the
         "Partnership") is a Florida limited  partnership that was organized for
         the purpose of acquiring both newly constructed and existing restaurant
         properties,  as well as properties  upon which  restaurants  were to be
         constructed,  which are leased  primarily  to operators of national and
         regional  fast-food,  family-style and casual dining restaurant chains.
         Under the terms of a registration  statement  filed with the Securities
         and Exchange  Commission,  the  Partnership  was  authorized  to sell a
         maximum  of  3,500,000  units   ($35,000,000)  of  limited  partnership
         interest.   A  total  of  3,500,000  units   ($35,000,000)  of  limited
         partnership interest had been sold as of December 31, 1998.

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

         Real  Estate  and  Lease  Accounting  -  The  Partnership  records  the
         acquisition of land and buildings at cost,  including  acquisition  and
         closing costs. Land and buildings are leased to unrelated third parties
         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 the  direct  financing  or  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

<PAGE>



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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


1.       Significant Accounting Policies - Continued:
         -------------------------------------------

                  so as to produce a constant  periodic rent over the lease term
                  commencing on the date the property is placed in service.

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

         When the  collection  of amounts  recorded as rental or other income is
         considered  to be  doubtful,  an  adjustment  is made to  increase  the
         allowance for doubtful accounts,  which is netted against  receivables,
         and to decrease rental or other income or increase bad debt expense for
         the  current  period,  although  the  Partnership  continues  to pursue
         collection of such amounts.  If amounts are subsequently  determined to
         be  uncollectible,  the  corresponding  receivable  and  allowance  for
         doubtful accounts are decreased accordingly.


<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


1.       Significant Accounting Policies - Continued:
         -------------------------------------------

         Investment  in  Joint  Ventures  -  The  Partnership's  investments  in
         Columbus  Joint  Venture,   CNL  Portsmouth   Joint  Venture  and  TGIF
         Pittsburgh  Joint  Venture are  accounted  for using the equity  method
         since the  Partnership  shares control with  affiliates  which have the
         same general partners.

         Cash and Cash Equivalents - The Partnership considers all highly liquid
         investments  with a maturity of three months or less when  purchased to
         be cash  equivalents.  Cash  and cash  equivalents  consist  of  demand
         deposits at commercial  banks 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  and  money  market  funds  may  exceed
         federally insured levels;  however, the Partnership has not experienced
         any losses in such accounts.

         Organization Costs - Prior to January 1, 1999,  organization costs were
         being  amortized  over  five  years  using  the  straight-line  method.
         Effective  January  1,  1999,  the  Partnership  adopted  Statement  of
         Position  98-5  "Reporting  on the Costs of Start-Up  Activities".  The
         statement  requires  that an  entity  expense  the  costs  of  start-up
         activities  and  organization  costs as they are incurred.  Adoption of
         this  statement  did not have a  material  effect of the  Partnership's
         financial position or results of operations.

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

         Additionally,  for tax  purposes,  syndication  costs are  included  in
         Partnership equity and in the basis of each partner's  investment.  For
         financial  reporting  purposes,  syndication  costs are netted  against
         partners' capital and represent a reduction of Partnership equity and a
         reduction in the basis of each partner's investment (Note 7).



<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


1.       Significant Accounting Policies - Continued:
         -------------------------------------------

         Rents Paid in  Advance - Rents  paid in  advance by lessees  for future
         periods are deferred upon receipt and are recognized as revenues during
         the period in which the rental income is earned.  Rents paid in advance
         include "interim rent" payments  required to be paid under the terms of
         certain leases for  construction  properties  equal to a pre-determined
         rate  times the  amount  funded by the  Partnership  during  the period
         commencing  with the  effective  date of the lease to the date  minimum
         annual rent becomes payable.  Once minimum annual rent becomes payable,
         the "interim rent" payments are amortized and recorded as income either
         (i) over the lease term so as to produce a  constant  periodic  rate of
         return for leases accounted for using the direct financing  method,  or
         (ii) over the lease  term  using the  straight-line  method  for leases
         accounted for using the operating method, whichever is applicable.

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

         Use of Estimates - The general  partners of the Partnership have made a
         number of estimates and assumptions relating to the reporting of assets
         and liabilities and the disclosure of contingent assets and liabilities
         to prepare these  financial  statements in  conformity  with  generally
         accepted accounting principles.  Actual results could differ from those
         estimates.

         Staff  Accounting  Bulletin 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 results of operations.

         Statement of  Financial  Accounting  Standards  No. 133 ("FAS 133") and
         Statement of Financial  Accounting  Standards  No. 137 ("FAS 137") - In
         June 1998, the Financial Accounting Standards Board issued Statement of
         Financial  Accounting  Standards No. 133,  "Accounting  for  Derivative
         Instruments  and  Hedging   Activities."   The  Statement   establishes
         accounting  and  reporting   standards  for   derivative   instruments,
         including

<PAGE>



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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


1.       Significant Accounting Policies - Continued:
         -------------------------------------------

         certain   derivative   instruments,   embedded   in   other   contracts
         (collectively referred to as derivatives),  and for hedging activities.
         The Statement  requires that an entity  recognize  all  derivatives  as
         either  assets or  liabilities  in the balance  sheet and measure those
         instruments  at fair  value.  In June 1999,  the  Financial  Accounting
         Standards Board issued Statement of Financial  Accounting Standards No.
         137,  "Accounting for Derivative  Instruments and Hedging  Activities -
         Deferral of the Effective  Date of FASB Statement No. 133, an Amendment
         of FASB  Statement No. 133." FAS 137 deferred the effective date of FAS
         133 for one year. FAS 133, as amended,  is now effective for all fiscal
         quarters  of all  fiscal  years  beginning  after  June 15,  2000.  The
         Partnership  has reviewed both  statements and has determined that both
         FAS 133 and FAS 137 do not apply to the  Partnership as of December 31,
         2000.

2.       Leases:
         ------

         The Partnership  leases its land and buildings to operators of national
         and regional  fast-food and  family-style  restaurants.  The leases are
         accounted for under the provisions of Statement of Financial Accounting
         Standards No. 13,  "Accounting  for Leases." Some of the  Partnership's
         leases are  classified as operating  leases and some of the leases have
         been classified as direct financing  leases.  For the leases classified
         as direct  financing  leases,  the  building  portions of the  property
         leases are  accounted  for as direct  financing  leases  while the land
         portions of the majority of the leases are operating leases. The leases
         have  initial  terms of 15 to 20 years and the  majority  of the leases
         provide for minimum and  contingent  rentals.  In addition,  the tenant
         generally 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 the tenants to renew the leases for two
         to five  successive  five-year  periods  subject  to the same terms and
         conditions as the initial  lease.  Most leases also allow the tenant to
         purchase the property at fair market value after a specified portion of
         the lease has elapsed.



<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


3.       Land and Buildings on Operating Leases:
         --------------------------------------

         Land and  buildings on operating  leases  consisted of the following at
December 31:

<TABLE>
<CAPTION>
<S><C>

                                                                    2000                   1999
                                                             --------------------   --------------------
                 Land                                               $ 12,008,124           $ 12,008,124
                 Buildings                                            12,459,435             11,603,999
                                                             --------------------   --------------------
                                                                      24,467,559             23,612,123
                 Less accumulated depreciation                        (1,295,350 )             (899,785 )
                                                             --------------------   --------------------
                                                                      23,172,209             22,712,338
                 Less allowance for loss on
                    land and building                                   (750,783 )             (197,466 )
                                                             --------------------   --------------------

                                                                    $ 22,421,426           $ 22,514,872
                                                             ====================   ====================
</TABLE>


         In  December  1999,  the  Partnership  sold its  property  in  Atlanta,
         Georgia,  to a third party and received net sales proceeds of $688,997,
         resulting in a gain of $46,300 for financial reporting  purposes.  This
         property was originally  acquired by the  Partnership in 1997 at a cost
         of approximately $617,600, excluding acquisition fees and miscellaneous
         acquisition expenses; therefore, the Partnership sold this property for
         a total of  approximately  $71,400 in excess of its  original  purchase
         price.

         During the year ended  December 31, 2000,  the  Partnership  recorded a
         provision  for loss on assets of $553,317  relating  to the  properties
         located in Timonium,  Maryland and Raleigh,  North Carolina. The tenant
         of the property in Timonium,  Maryland  declared  bankruptcy in October
         1998 and rejected the lease  relating to this property in June 2000. In
         October  2000,  the tenant of the property in Raleigh,  North  Carolina
         terminated  its  lease.   The  provisions  for  loss   represented  the
         difference between the net carrying value of the properties at December
         31, 2000, and the realizable value for the properties.

         Generally,  the leases provide for escalating  guaranteed minimum rents
         throughout the lease term.  Income from these  scheduled rent increases
         is  recognized on a  straight-line  basis over the terms of the leases.
         For the years ended December 31, 2000,  1999 and 1998, the  Partnership
         recognized  $195,700  (net of  $140,012  in  reversals),  $196,020  and
         $209,725, respectively, of such rental income.


<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


3.       Land and Buildings on Operating Leases:
         --------------------------------------

         The following is a schedule of the future  minimum lease payments to be
         received on the noncancellable operating leases at December 31, 2000:

<TABLE>
<CAPTION>
<S><C>


                   2001                               $2,066,948
                   2002                                2,121,036
                   2003                                2,174,814
                   2004                                2,186,416
                   2005                                2,186,416
                   Thereafter                         20,560,960
                                                 ----------------

                                                     $31,296,590
                                                 ================
</TABLE>

         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 term. 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 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>
<S><C>
                                                                             2000                  1999
                                                                       -----------------     -----------------

                   Minimum lease payments
                        receivable                                          $ 7,689,932          $ 10,184,633
                   Estimated residual values                                  1,420,667             1,420,667
                   Less unearned income                                      (5,126,303 )          (6,395,541 )
                                                                       -----------------     -----------------

                   Net investment in direct
                        financing leases                                    $ 3,984,296           $ 5,209,759
                                                                       =================     =================
</TABLE>



<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


4.       Net Investment in Direct Financing Leases-Continued:
         ----------------------------------------------------

         During the year ended  December 31, 2000,  the  Partnership  recorded a
         provision for loss on the building of $299,849 relating to the property
         located  in San  Antonio,  Texas.  In June  2000,  the  tenant  of this
         property  defaulted under the terms of its lease,  vacated the property
         and ceased  operation.  As a result,  the Partnership  reclassified the
         related assets from net investment in direct  financing  leases to land
         and building on  operating  leases.  In  accordance  with  Statement of
         Financial  Accounting  Standards No. 13,  "Accounting  for Leases," the
         Partnership  recorded the  reclassified  asset at the lower of original
         cost,  present  fair  value,  or  present  carrying  value.  No loss on
         termination  of direct  financing  leases was  recorded  for  financial
         reporting purposes during 1999 and 1998.

         The  following  is a schedule of future  minimum  lease  payments to be
         received on direct financing leases at December 31, 2000:

                      2001                       $ 440,708
                      2002                         446,711
                      2003                         455,116
                      2004                         455,116
                      2005                         455,116
                      Thereafter                 5,437,165
                                           ----------------

                                                $7,689,932
                                           ================

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

5.       Investment in Joint Ventures:
         ----------------------------

         In  August  1998,  the   Partnership   entered  into  a  joint  venture
         arrangement,  Columbus  Joint Venture,  with  affiliates of the general
         partners,  to construct and hold one restaurant  property.  During 1999
         and  1998,   the   Partnership   contributed   $195,700  and  $166,025,
         respectively,  to purchase land and pay construction  costs relating to
         the Property owned by the joint  venture.  As of December 31, 2000, the
         Partnership  had a 39.93%  interest  in the  profits  and losses of the
         joint venture.



<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


5.       Investment in Joint Venture - Continued:
         ---------------------------------------

         In  February  1999,  the  Partnership  entered  into  a  joint  venture
         arrangement,  CNL Portsmouth  Joint  Venture,  with CNL Income Fund XI,
         Ltd.,  a Florida  limited  partnership  and an affiliate of the general
         partners,  to own and lease one restaurant property. As of December 31,
         2000, the  Partnership had  contributed  approximately  $330,500 to the
         joint venture and owned a 57.2% interest in this joint venture.

         In June 2000, the Partnership used the net sales proceeds from the 1999
         sale of the property in Atlanta,  Georgia, along with additional funds,
         to  invest  in a  joint  venture  arrangement,  TGIF  Pittsburgh  Joint
         Venture,  with CNL Income Fund VII, Ltd., CNL Income Fund XV, Ltd., and
         CNL Income  Fund XVI,  Ltd.,  each a Florida  limited  partnership  and
         affiliate  of the  general  partners,  to own and lease one  restaurant
         property. The Partnership accounts for this investment using the equity
         method since the  Partnership  shared  control with  affiliates.  As of
         December  31,  2000,  the  Partnership  had  contributed  approximately
         $1,001,600  to the joint  venture  and owned a 39.5%  interest  in this
         joint venture.  In January 2001, the Partnership  sold a portion of its
         interest in TGIF Pittsburgh Joint Venture to CNL Income Fund VII, Ltd.,
         a Florida limited partnership and an affiliate of the General Partners,
         for  approximately  $500,000.  The  Partnership  intends to use the net
         sales proceeds to pay other  liabilities and to meet the  Partnership's
         working capital and other needs (see Note 13).


<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


5.       Investment in Joint Venture - Continued:
         ---------------------------------------

         As of December 31, 2000,  Columbus Joint Venture,  CNL Portsmouth Joint
         Venture,  and TGIF  Pittsburgh  Joint Venture each owned and leased one
         property,  to operators of fast-food or family-style  restaurants.  The
         following presents the combined,  condensed  financial  information for
         the joint ventures at December 31:

<TABLE>
<CAPTION>
<S><C>

                                                                               2000                 1999
                                                                          ---------------      ---------------
                  Land and buildings on operating
                      leases, less accumulated
                      depreciation                                            $3,632,190           $1,142,511
                  Net investment in direct financing
                      lease                                                      317,357              320,961
                  Accrued rental income                                           56,163               19,219
                  Cash                                                            48,518                7,969
                  Receivables                                                         --                  851
                  Prepaid expenses                                                   377                  483
                  Liabilities                                                     13,055               21,233
                  Partners' capital                                            4,041,550            1,470,761
                  Revenue                                                        306,267              151,716
                  Net income                                                     256,965              131,214

</TABLE>


         The Partnership  recognized income totaling $112,863 and $61,656 during
         the years ended  December 31, 2000 and 1999,  respectively,  from these
         joint ventures.

6.       Restricted Cash:
------------------------

         As of December 31, 1999,  the net sales  proceeds of $688,997  from the
         sale of the  property in Atlanta,  Georgia,  plus  accrued  interest of
         $1,888, were being held in an  interest-bearing  escrow account pending
         the  release  of funds by the escrow  agent to  acquire  an  additional
         property.  These funds were  released  by the escrow  agent in 2000 and
         were used,  along  with other  funds,  to acquire an  interest  in TGIF
         Pittsburgh Joint Venture (see Note 5).


<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


7.       Syndication Costs:
         -----------------

         Syndication  costs  consisting  of  legal  fees,  commissions,  the due
         diligence  expense  reimbursement  fee,  printing  and  other  expenses
         incurred in connection with the offering  totalled $76,882 for the year
         ended December 31, 1998.  These  offering  expenses were charged to the
         limited  partners' capital accounts to reflect the net capital proceeds
         of the offering.  No such charges were  incurred  during the year ended
         December 31, 1999 and 2000.

8.       Allocations and Distributions:
         -----------------------------

         From inception through December 31, 1999,  generally,  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  will be  subordinated  to receipt by the limited
         partners in that year of an eight percent noncumulative,  noncompounded
         return on their aggregate invested capital  contributions (the "Limited
         Partners' 8% Return").

         From the 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.

         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.



<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


8.       Allocations and Distributions- Continued:
         ----------------------------------------

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

         Generally,  net sales  proceeds from a liquidating  sale of properties,
         will be used in the following  order (i) first to pay and discharge all
         of  the  Partnership's   liabilities  to  creditors,  (ii)  second,  to
         establish  reserves that may be deemed necessary for any anticipated or
         unforeseen liabilities or obligations of the Partnership,  (iii) third,
         to pay all of the Partnership's liabilities, if any, to the general and
         limited partners,  (iv) fourth,  after allocations of net income, gains
         and/or losses,  to the partners with positive capital account 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  partner 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, 2000.

         During  the  years  ended  December  31,  2000,   1999  and  1998,  the
         Partnership   declared   distributions   to  the  limited  partners  of
         $2,800,000,  $2,799,998 and $2,657,764,  respectively. No distributions
         have been made to the general partners to date.


<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


9.       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>
<S><C>

                                                                   2000             1999              1998
                                                               --------------   --------------   ---------------

             Net income for financial reporting purposes        $  1,117,197     $  2,515,356      $  2,302,322

             Depreciation for tax reporting purposes less
             than (in
                  excess of) depreciation for financial                2,804          (21,493 )         (33,436 )
             reporting
                  purposes

             Amortization for financial reporting purposes
                  less than amortization for tax
                  reporting purposes                                  (7,088 )         (3,108 )          (3,984 )

             Equity in earnings of joint venture for tax
                  reporting purposes in excess of (less
             than) equity
                  in earnings of joint venture for financial         (16,905 )         (8,745 )           7,168
                  reporting purposes

             Allowance for loss on assets                            853,166               --           197,466

               Direct financing leases recorded as operating
                  leases for tax reporting purposes                   70,178           84,855            81,211

             Capitalization (Deduction) of transaction costs
             for tax                                                 (89,716 )         74,734            15,522
                  reporting purposes

             Allowance for doubtful accounts                         112,821          (51,017 )          62,155

             Gain on sale of land and buildings for financial
                  reporting purposes less than gain
                  on sale for tax reporting purposes                      --           33,870                --

             Accrued rental income                                   (56,423 )       (196,020 )        (209,725 )

             Other assets                                                 --             (540 )              --

             Deferred rental income                                  (39,853 )        (12,990 )         (73,028 )

             Rents paid in advance                                    (6,495 )          6,618           (20,926 )
                                                               --------------   --------------   ---------------

             Net income for federal income tax purposes         $  1,939,686     $  2,421,520      $  2,324,745
                                                               ==============   ==============   ===============

</TABLE>




<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


10.      Related Party Transactions:
         --------------------------

         One of the individual general partners, James M. Seneff, Jr., is one of
         the principal  shareholders of CNL Holdings,  Inc. The other individual
         general partner, Robert A. Bourne, serves as President and Treasurer of
         CNL Financial  Group,  Inc., a wholly owned subsidiary of CNL Holdings,
         Inc. CNL Fund  Advisors,  Inc.  (the  "Advisor")  was a majority  owned
         subsidiary  of CNL  Financial  Group,  Inc.  until it  merged  with CNL
         American  Properties Fund, Inc.,  ("APF") effective  September 1, 1999.
         The individual general partners are stockholders and directors of APF.

         CNL  Securities  Corp.  was  entitled  to receive  selling  commissions
         amounting to 8.5% of the total amount  raised from the sale of units of
         limited  partnership  interest  for  services  in  connection  with the
         formation of the  Partnership  and the offering of units, a substantial
         portion of which was paid as commissions to other  broker-dealers.  For
         the year ended December 31, 1998, the Partnership  incurred  $72,611 of
         which $67,539 was reallowed to other broker-dealers.  No such fees were
         incurred during 2000 and 1999.

         In  addition,  CNL  Securities  Corp.  was  entitled  to  receive a due
         diligence  expense  reimbursement fee equal to 0.5% of the total amount
         raised  from  the  sale of units of  limited  partnership  interest,  a
         portion of which was reallowed to other  broker-dealers  and from which
         all due diligence  expenses were paid.  For the year ended December 31,
         1998,  the  Partnership  incurred  $4,271 of such fees. The majority of
         these fees were reallowed to other  broker-dealers  for payment of bona
         fide due diligence expenses.

         CNL Fund Advisors,  Inc. was entitled to receive  acquisition  fees for
         services in finding,  negotiating and acquiring properties on behalf of
         the Partnership  equal to 4.5% of the total amount raised from the sale
         of units of limited partnership  interest.  For the year ended December
         31, 1998, the Partnership incurred $38,441, of such fees. Such fees are
         included in land and  buildings,  net  investment  in direct  financing
         leases, investment in joint ventures and other assets.



<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


10.      Related Party Transactions - Continued:
         --------------------------------------

         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  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 Advisor.  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 Advisor  shall  determine.  For the years
         ended  December  31,  2000,  1999 and 1998,  the  Partnership  incurred
         $27,875, $30,235 and $28,038, respectively, for such management fees.

         The Advisor is also  entitle to receive a deferred,  subordinated  real
         estate  disposition fee, payable upon the sale of 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 net 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 receipt by the limited
         partners of their  aggregate  Limited  Partners' 8% Return,  plus their
         invested capital contributions.  No deferred,  subordinated real estate
         disposition fees have been incurred since inception.

         During the years ended  December 31, 2000,  1999, and 1998, the Advisor
         and its  affiliates  provided  various  administrative  services to the
         Partnership,  including services related to accounting;  financial, tax
         and regulatory  compliance and  reporting;  lease and loan  compliance;
         limited  partners  distributions  and  reporting;   due  diligence  and
         marketing; and investor relations (including administrative services in
         connection with selling units of limited  partnership  interest),  on a
         day-to-day  basis  including  services  relating  to the  proposed  and
         terminated  merger.  For the years ended  December 31, 2000,  1999, and
         1998,  the  Partnership   incurred  $92,444,   $82,382,  and  $104,709,
         respectively, for such expenses.

         The  amounts  due to related  parties at  December  31,  2000 and 1999,
         totaled $53,181 and $36,737, respectively.



<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


11.      Concentration of Credit Risk:
         ----------------------------

         The  following   schedule  presents  total  rental  and  earned  income
         (including  the  Partnership's  share of total rental and earned income
         from joint ventures) from individual  lessees,  each  representing more
         than ten percent of the  Partnership's  total rental and earned  income
         for each of the years ended December 31:

<TABLE>
<CAPTION>
<S><C>

                                                             2000                1999                1998
                                                        ----------------    ----------------    ---------------

               Golden Corral Corporation                      $ 657,612           $ 657,612          $ 626,564
               Jack in the Box Inc.
                    (formerly Foodmaker,
                    Inc. in 1999 and 1998)                      509,456             509,456            509,456

</TABLE>


         In addition,  the following  schedule  presents total rental and earned
         income  (including the  Partnership's  share of total rental and earned
         income from joint ventures) from  individual  restaurant  chains,  each
         representing  more than ten percent of the  Partnership's  total rental
         and earned income for each of the years ended December 31:

<TABLE>
<CAPTION>
<S><C>

                                                            2000                1999                 1998
                                                       ----------------    ----------------     ---------------

              Golden Corral                                  $ 657,612           $ 908,481           $ 784,292
              Jack in the Box                                  509,456             509,456             509,456
              Boston Market                                        N/A             350,901             455,118

</TABLE>


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


<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


11.      Concentration of Credit Risk - Continued:
         ----------------------------------------

         In 1998, Boston Chicken,  Inc.,  Finest  Foodservice,  L.L.C.,  and WMJ
         Texas, Inc., the tenants of three of the Boston Market properties filed
         for  bankruptcy  and rejected the lease  relating to one  property.  In
         2000, the tenants  rejected the two remaining  leases.  The Partnership
         will not recognize any rental income relating to this properties  until
         new tenants for the properties are located, or until the properties are
         sold and the proceeds  from such a sale are  reinvested  in  additional
         properties. The lost revenues resulting from the three leases that were
         rejected,  could have an adverse effect on the results of operations of
         the  Partnership  if  the  Partnership  is  unable  to  re-lease  these
         Properties  in a timely  manner.  The general  partners  are  currently
         seeking either new tenants or purchasers for these Properties.

12.      Selected Quarterly Financial Data:
------------------------------------------

         The following table presents  selected  unaudited  quarterly  financial
         data for each full quarter during the years ended December 31, 2000 and
         1999.

<TABLE>
<CAPTION>
<S><C>

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

         Revenue (1)                      $776,928         $655,578          $686,946          $661,661        $ 2,781,113
         Net income (loss)                 602,591          397,789           224,681          (107,864  )       1,117,197
         Net income per
             limited partner
             unit                             0.17             0.11              0.06             (0.02  )            0.32

              1999 Quarter               First            Second            Third            Fourth              Year
         ------------------------    --------------    -------------     -------------    --------------     --------------

         Revenue (1)                      $785,088         $873,037          $795,409          $738,837        $ 3,192,371
         Net income                        583,512          718,638           645,245           567,961          2,515,356
         Net income per
             limited partner
             unit                             0.17             0.21              0.18              0.16               0.72

</TABLE>


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


<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


13.      Subsequent Event:
-------------------------

         In January 2001, the Partnership sold a portion of its interest in TGIF
         Pittsburgh  Joint  Venture  to CNL  Income  Fund VII,  Ltd.,  a Florida
         limited  partnership  and an  affiliate  of the General  Partners,  for
         approximately  $500,000.  The Partnership  intends to use the net sales
         proceeds to pay other liabilities and to meet the Partnership's working
         capital and other needs.



<PAGE>


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

         None.

                                    PART III


Item 10.  Directors and Executive Officers of the Registrant

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

         James M. Seneff, Jr., age 54. 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 (the "Advisor") until it merged with APF in September 1999, and in June
2000,  was  re-elected  to those  positions  of the  Advisor.  Mr.  Seneff  is a
principal stockholder of CNL Holdings, Inc., the parent company of CNL Financial
Group, Inc. (formerly CNL 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 53. 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 and Vice  Chairman 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 the  Advisor  prior to its
merger with 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.  (formerly CNL Group,  Inc.);  Director,
Vice Chairman of the Board and President of CNL Hospitality Properties,  Inc., a
public,  unlisted  real  estate  investment  trust;  as well  as,  Director  and
President of CNL Hospitality Corp., its advisor. In addition,  Mr. Bourne serves
as Director and President of CNL Retirement Properties, Inc., a public, unlisted
real  estate  investment  trust;  as well as, a Director  and  President  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 45. 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 the  Advisor,  Mr.  McWilliams  served as  President of APF from
February 1999 until  September 1999. From April 1997 to February 1999, he served
as Executive Vice President of APF. Mr.  McWilliams  joined CNL Financial Group,
Inc.  (formerly CNL Group,  Inc.) in April 1997 and served as an Executive  Vice
President until September 1999. In addition,  Mr. McWilliams served as President
of the  Advisor  and CNL  Financial  Services,  Inc.  from  April 1997 until the
acquisition  of such  entities by 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.

         John T. Walker, age 42. Mr. Walker has served as President of APF since
September 1999 and as Chief Operating  Officer since March 1995. Mr. Walker also
served as a board member of CNL Restaurant Property Services, Inc., a subsidiary
of APF from  December  1999  until  December  2000.  Previously,  he  served  as
Executive Vice President of APF from January 1996 to September  1999. Mr. Walker
joined the Advisor in September  1994, as Senior Vice President  responsible for
Research  and  Development.  He  served as the Chief  Operating  Officer  of the
Advisor from April 1995 until  September  1999 and as Executive  Vice  President
from January 1996 until  September  1999,  at which time it merged with APF. Mr.
Walker also served as Executive  Vice President of CNL  Hospitality  Properties,
Inc. and CNL Hospitality Corp.  (formerly CNL Hospitality  Advisors,  Inc.) from
1997 to October 1998. From May 1992 to May 1994, he was Executive Vice President
for Finance and  Administration  and Chief Financial Officer of Z Music, Inc., a
cable   television   network   which  was   subsequently   acquired  by  Gaylord
Entertainment, where he was responsible for overall financial and administrative
management  and planning.  From January 1990 through April 1992,  Mr. Walker was
Chief Financial  Officer of the First Baptist Church in Orlando,  Florida.  From
April 1984 through  December  1989, he was a partner in the  accounting  firm of
Chastang,  Ferrell & Walker,  P.A.,  where he was the partner in charge of audit
and  consulting  services,  and  from  1981 to  1984,  Mr.  Walker  was a Senior
Consultant/Audit Senior at Price Waterhouse.  Mr. Walker is a cum laude graduate
of Wake Forest  University  with a Bachelor of Science degree in Accountancy and
is a certified public accountant.

         Steven  D.  Shackelford,  age  37.  Mr.  Shackelford  was  promoted  to
Executive  Vice  President and Chief  Financial  Officer of APF in July 2000. He
served as Senior Vice President and Chief Financial Officer of APF since January
1997.  Mr.  Shackelford  also served as  Secretary  and  Treasurer  of APF since
September  1999. He also served as Chief  Financial  Officer of the Advisor 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.


Item 12.  Security Ownership of Certain Beneficial Owners and Management

         As of March 15,  2001,  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, 2001,  the beneficial
ownership interests of the General Partners in the Registrant.

<TABLE>
<CAPTION>
<S><C>


                                                                            Amount and Nature of
         Title of Class                          Name of Partner            Beneficial Ownership         Percent of Class
---------------------------------            -------------------------    --------------------------     -----------------

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

           Limited Partnership Interest                 Robert A. Bourne                    2,500 Units                     0.07%
                                                                                                                   ---------------
                                                                                                                            0.07%
                                                                                                                   ===============
</TABLE>


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




<PAGE>



Item 13.  Certain Relationships and Related Transactions

         The  table  below   summarizes  the  types,   recipients,   methods  of
computation and amounts of compensation,  fees and distributions paid or payable
by the  Partnership  to the General  Partners and their  affiliates for the year
ended  December 31, 2000,  exclusive of any  distributions  to which the General
Partners or their affiliates may be entitled in the event they purchase Units.

<TABLE>
<CAPTION>
<S><C>

                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
         and Recipient                         Method of Computation                  Ended December 31, 2000
---------------------------------      --------------------------------------      ------------------------------

Reimbursement  to affiliates for       Operating  expenses are reimbursed at       Accounting                and
operating expenses                     the  lower of cost or 90  percent  of       administra-tive     services:
                                       the   prevailing    rate   at   which       $92,444
                                       comparable  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       $27,875
affiliates                             revenues   (excluding  noncash  lease
                                       accounting      adjustments)     from
                                       Properties wholly owned by the
                                       Partnership plus the Partnership's
                                       allocable share of gross revenues of
                                       joint    ventures    in   which   the
                                       Partnership  is  a  co-venturer.  The
                                       management fee, which will not
                                       exceed     competitive    fees    for
                                       comparable services in the same
                                       geographic area, may or may not be
                                       taken,  in whole or in part as to any
                                       year, in the sole discretion of 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.




<PAGE>




                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
         and Recipient                         Method of Computation                  Ended December 31, 2000
---------------------------------      --------------------------------------      ------------------------------

Deferred,    subordinated   real       A deferred,  subordinated real estate       $-0-
estate  disposition  fee payable       disposition  fee,  payable  upon sale
to the 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 the
                                       Affiliates provides a substantial
                                       amount of services in connection
                                       with  the  sale  of  a  Property   or
                                       Properties and shall be subordinated
                                       to  certain  minimum  returns  to the
                                       limited partners.

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

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



</TABLE>


<PAGE>



                                     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, 2000 and 1999

                 Statements  of Income for the years ended  December  31,  2000,
                 1999, and 1998

                 Statements  of Partners'  Capital for the years ended  December
                 31, 2000, 1999, and 1998

                 Statements of Cash Flows for the years ended December 31, 2000,
                 1999, and 1998

                  Notes to Financial Statements

         2.  Financial Statement Schedules

                  Schedule II - Valuation and Qualifying  Accounts for the years
                  ended December 31, 2000, 1999, and 1998

                 Schedule  III - Real  Estate and  Accumulated  Depreciation  at
                 December 31, 2000

                 Notes  to   Schedule   III  -  Real   Estate  and   Accumulated
                 Depreciation at December 31, 2000

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

         3.  Exhibits

               **3.1       Affidavit and  Certificate of Limited  Partnership of
                           CNL Income Fund XVIII,  Ltd. (Filed as Exhibit 3.2 to
                           the Registrant's Registration Statement on Form S-11,
                           No. 33-90998-01, incorporated herein by reference.)

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

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

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


<PAGE>



               **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.)

               **5.1       Opinion of Baker &  Hostetler  as to the  legality of
                           the  securities  being  registered by CNL Income Fund
                           XVIII,  Ltd.  (Filed as Exhibit 5.2 to Amendment  No.
                           Three to the Registrant's  Registration Statements on
                           Form  S-11,  No.  33-90998,  incorporated  herein  by
                           reference.)

               **8.1       Opinion  of  Baker  &  Hostetler   regarding  certain
                           material  tax  issues  relating  to CNL  Income  Fund
                           XVIII,  Ltd.  (Filed as Exhibit 8.1 to Amendment  No.
                           Three to the Registrant's  Registration  Statement on
                           Form  S-11,  No.  33-90998,  incorporated  herein  by
                           reference.)

               **8.2       Opinion  of  Baker  &  Hostetler   regarding  certain
                           material   issues   relating   to  the   Distribution
                           Reinvestment  Plan of CNL  Income  Fund  XVIII,  Ltd.
                           (Filed as Exhibit 8.4 to  Amendment  No. Three to the
                           Registrant's Registration Statement on Form S-11, No.
                           33-90998, incorporated herein by reference.)

               **8.3       Amended  Opinion  of  Baker  &  Hostetler   regarding
                           certain  material  issues relating to CNL Income Fund
                           XVIII,  Ltd. (Filed as Exhibit 8.5 to  Post-Effective
                           Amendment No. Four to the  Registrant's  Registration
                           Statement on Form S-11,  No.  33-90998,  incorporated
                           herein by reference.)

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

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

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

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

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

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

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

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

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

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

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

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

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

               (b)         The  Registrant  filed no  reports on Form 8-K during
                           the period October 1, 2000 through December 31, 2000.

         (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,
                  2000.  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 30th day of
March, 2001.

                           CNL INCOME FUND XVIII, LTD.

                           By:      CNL REALTY CORPORATION
                                    General Partner

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


                           By:      ROBERT A. BOURNE
                                    General Partner

                                    /s/ Robert A. Bourne
                                    -----------------------------------

                                    ROBERT A. BOURNE


                           By:      JAMES M. SENEFF, JR.
                                    General Partner

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




<PAGE>




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

<TABLE>
<CAPTION>
<S><C>

               Signature                                  Title                                  Date



/s/ Robert A. Bourne                     President,   Treasurer   and   Director            March 30, 2001
------------------------------------
Robert A. Bourne                         (Principal   Financial  and  Accounting
                                         Officer)

/s/ James M. Seneff, Jr.                 Chief  Executive  Officer and  Director            March 30, 2001
------------------------------------
James M. Seneff, Jr.                     (Principal Executive Officer)

</TABLE>


<PAGE>





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

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                  Years Ended December 31, 2000, 1999, and 1998

<TABLE>
<CAPTION>
<S><C>

                                                      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
----------    -----------------   --------------  ---------------  ----------------    -------------     ------------  ------------

----------
  1998        Allowance for
                  doubtful
                  accounts (a)          $    35          $    --        $   70,921 (b)       $   -- (c)     $  8,767      $ 62,189
----------                        ==============  ===============  ================    =============     ============  ============

----------
  1999        Allowance for
                  doubtful
                  accounts (a)        $  62,189          $    --        $    6,392 (b)    $   9,987 (c)     $ 47,422      $ 11,172
----------
                                  ==============  ===============  ================    =============     ============  ============

----------
----------
  2000        Allowance for
                  doubtful
                  accounts (a)        $  11,172          $    --        $  131,350 (b)    $  18,529 (c)       $   --     $ 123,993
                                  ==============  ===============  ================    =============     ============  ============

</TABLE>


(a)    Deducted from receivables on the balance sheet.

(b)    Reduction of rental and other income.

(c)    Amounts written off as uncollectible.




<PAGE>

<TABLE>
<CAPTION>
<S><C>


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

    Arby's Restaurant:
      Lexington, North Carolina-            $210,977            -            -        -

    Bennigan's Restaurant:
      Sunrise, Florida         -           1,147,705      925,087            -        -

    Boston Market Restaurants:
      Raleigh, North Carolina (-)            702,215      599,388            -        -
      Timonium, Maryland       -             769,653            -      429,774        -
      San Antonio, Texas       -             677,584            -      223,333        -
      Minnetonka, Minnesota (i)-             574,766            -       25,792 (h)    -

    Burger King Restaurant:
      Kinston, North Carolina  -             262,498      663,421            -        -

    Chevy's Fresh Mex Restaurant:
      Mesa, Arizona            -           1,029,236    1,598,376            -        -

    Golden Corral Family
      Steakhouse Restaurants:
          Houston, Texas       -             889,003            -      844,282        -
          Galveston, Texas     -             687,946            -      836,386        -
          Elizabethtown, Kentuc-y            488,945            -    1,045,207        -
          Destin, Florida      -             565,354            -    1,022,196        -

    Ground Round Restaurant:
      Rochester, New York      -             525,891      582,882            -        -

    IHOP Restaurant:
      Santa Rosa, California   -             501,216            -            -        -

    Jack in the Box Restaurants:
      Centerville, Texas       -             261,913            -      543,079        -
      Echo Park, California    -             674,647            -      659,358        -
      Henderson, Nevada        -             522,741            -      608,548        -
      Houston, Texas           -             778,706            -      589,840        -

    NI's Interational Buffet
      Restaurant:
          Stow, Ohio           -             489,799            -            -        -

    Wendy's Restaurant:
      Sparta, Tennessee        -             221,537            -      432,842        -

    On The Border Restaurant:
      San Antonio, Texas (k)   -                   -            -    1,288,148        -
                                          -----------  -----------  -----------  -------

                                          $11,982,332  $4,369,154   $8,548,785        -
                                          ===========  ===========  ===========  =======


Properties the Partnership
    Invested in Under
    Direct Financing Leases:

    Arby's Restaurant:
        Lexington, North Caroli-a                  -     $459,004            -        -

    Golden Corral Family
        Steakhouse Restaurant:
            Stow, Ohio         -                   -    1,280,986            -        -

    IHOP Restaurants:
        Bridgeview, Illinois   -             354,227    1,151,199            -        -
        Santa Rosa, California -                   -      859,306            -        -
                                          -----------  -----------  -----------  -------
                                          -----------  -----------

                                            $354,227   $3,750,495           $0        -
                                          ===========  ===========  ===========  =======

Property of Joint Venture
    in Which the Partnership
    has a 39.93% Interest
    in Under an Operating Lease:

    Arby's Restaurant:
      Columbus, Ohio           -            $407,096            -     $498,684        -
                                          ===========  ===========  ===========  =======

Property of Joint Venture
    in Which the Partnership
    has a 57.20% Interest
    in Under an Operating Lease:

    Taco Bell Restaurant:
      Portsmouth, Virginia     -            $254,046            -            -        -
                                          ===========  ===========  ===========  =======

Property of Joint Venture
    in Which the Partnership
    has a 39.50% Interest
    in Under an Operating Lease:

    TGIF's Restaurant:
      Homestead, Pittsburgh    -          $1,036,296   $1,499,296            -        -
                                          ===========  ===========  ===========  =======

Property of Joint Venture
    in Which the Partnership
    has a 57.20% Interest
    in Under a Direct Financing Lease:

    Taco Bell Restaurant
      Portsmouth, Virginia     -                   -     $323,725            -        -
                                          ===========  ===========  ===========  =======

                                                                                      Life on Which
                   Gross Amount at Which                                              Depreciation in
                 Carried at Close of Period (c)               Date                    Latest Income
-------------------------------------------
                 Buildings and                Accumulated     of Con-    Date         Statement is
    Land         Improvements     Total       Depreciation    struction Acquired        Computed
-------------    -----------    -----------   -----------     ------    --------      ------------





    $210,977             (f)      $210,977             -      1997       07/97            (d)


   1,147,705        925,087      2,072,792        78,358      1982       06/98            (b)


     702,215        599,388      1,301,603        78,657      1994       01/97            (b)
     769,653 (j)    429,774      1,199,427        47,878      1997       05/97            (b)
     677,584        223,333        900,917        25,056      1997       04/97            (b)
     600,558 (h)         (f)       600,558             -      1997       04/97            (d)


     262,498        663,421        925,919        88,656      1994       12/96            (b)


   1,029,236      1,598,376      2,627,612       159,945      1994       12/97            (b)



     889,003        844,282      1,733,285       105,517      1997       12/96            (b)
     687,946        836,386      1,524,332       100,874      1997       01/97            (b)
     488,945      1,045,207      1,534,152       111,334      1997       05/97            (b)
     565,354      1,022,196      1,587,550        98,777      1998       09/97            (b)


     525,891        582,882      1,108,773        62,131      1981       10/97            (b)


     501,216             (f)       501,216             -      1997       05/97            (d)


     261,913        543,079        804,992        66,952      1997       01/97            (b)
     674,647        659,358      1,334,005        77,153      1997       01/97            (b)
     522,741        608,548      1,131,289        70,986      1997       01/97            (b)
     778,706        589,840      1,368,546        64,325      1997       05/97            (b)



     489,799             (f)       489,799             -      1997       04/97            (d)


     221,537        432,842        654,379        48,229      1997       04/97            (b)


           -        855,436        855,436        10,522      1997       04/97            (k)
-------------    -----------    -----------   -----------

 $12,008,124     $12,459,435    $24,467,559   $1,295,350
=============    ===========    ===========   ===========







           -             (f)            (f)           (d)     1997       07/97            (d)



           -             (f)            (f)           (d)     1997       04/97            (d)


          (f)            (f)            (f)           (d)     1972       07/97            (e)










    $407,096       $498,684       $905,780       $33,938      1998       08/98            (b)
=============    ===========    ===========   ===========







    $254,046             (g)      $254,046            (d)     1997       02/99            (d)
=============                   ===========







  $1,036,296     $1,499,296     $2,535,592       $29,290      2000       06/00            (b)
=============    ===========    ===========   ===========







          (g)            (g)            (g)           (d)     1997       02/99            (d)

</TABLE>






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

        NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 2000


(a)      Transactions in real estate and accumulated  depreciation  during 2000,
         1999, 1998, and 1997 are summarized as follows:
<TABLE>
<CAPTION>
<S><C>
                                                                                              Accumulated
                                                                              Cost            Depreciation
                                                                         ----------------   -------------------
            Properties the Partnership has Invested in Under
              Operating Leases:

                 Balance, December 31, 1997                                 $ 21,451,442         $   140,380
                 Acquisitions                                                  2,134,889                  --
                 Depreciation expense                                                 --             372,473
                                                                         ----------------   -----------------

                 Balance, December 31, 1998                                   23,586,331             512,853
                 Acquisitions                                                     25,792                  --
                 Depreciation expense                                                 --             386,932
                                                                         ----------------   -----------------

                 Balance, December 31, 1999 (i)                               23,612,123             899,785
                 Reclassified from net investment in direct
                   financing lease (k)                                           855,436                  --
                 Depreciation expense                                                 --             395,565
                                                                         ----------------   -----------------

                 Balance, December 31, 2000 (i)(j)(l)                       $ 24,467,559        $  1,295,350
                                                                         ================   =================

            Property  of Joint  Venture  in Which the  Partnership  has a 39.93%
              Interest and has Invested in Under an Operating Lease:

                 Balance, December 31, 1998                                  $   875,700            $     --
                 Acquisitions                                                     30,080                  --
                 Depreciation expense                                                 --              17,315
                                                                         ----------------   -----------------

                 Balance, December 31, 1999                                      905,780              17,315
                 Acquisitions                                                         --                  --
                 Depreciation expense                                                 --              16,623
                                                                         ----------------   -----------------

                 Balance, December 31, 2000                                  $   905,780         $    33,938
                                                                         ================   =================


</TABLE>

<PAGE>




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

        NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 2000


(a)      Transactions in real estate and accumulated  depreciation  during 2000,
         1999, 1998, and 1997 are summarized as follows:

<TABLE>
<CAPTION>
<S><C>

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

            Property  of Joint  Venture  in Which the  Partnership  has a 57.20%
              Interest and has Invest in Under an Operating Lease:

                 Balance, December 31, 1998                                     $     --            $     --
                 Acquisitions                                                    254,046                  --
                 Depreciation expense (d)                                             --                  --
                                                                         ----------------   -----------------

                 Balance, December 31, 1999                                      254,046                  --
                 Depreciation expense (d)                                             --                  --
                                                                         ----------------   -----------------

                 Balance, December 31, 2000                                      254,046                  --
                 Depreciation expense (j)                                             --                  --
                                                                         ----------------   -----------------

                 Balance, December 31, 2000                                      254,046                  --
                                                                         ================   =================

            Property  of Joint  Venture  in Which the  Partnership  has a 39.50%
              Interest and has Invest in Under an Operating Lease:

                 Balance, December 31, 1999                                     $     --            $     --
                 Acquisition                                                   2,535,592                  --
                 Depreciation expense                                                 --              29,290
                                                                         ----------------   -----------------

                 Balance, December 31, 2000                                 $  2,535,592         $    29,290
                                                                         ================   =================

</TABLE>


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

(c)      As of December 31, 2000, the aggregate cost of the Properties  owned by
         the  Partnership and the joint ventures for federal income tax purposes
         was  $26,932,200 and  $3,925,143,  respectively.  All of the leases are
         treated as operating leases for federal income tax purposes.

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

(e)      For financial reporting  purposes,  the lease for the land and building
         has been recorded as a direct financing lease. The cost of the land and
         building  has been  included  in net  investment  in  direct  financing
         leases; therefore, depreciation is not applicable.

(f)      For  financial  reporting  purposes,  certain  components  of the lease
         relating to land and building have been recorded as a direct  financing
         lease.  Accordingly,  costs relating to these  components of this lease
         are not shown.



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

        NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 2000


(g)      For financial reporting purposes,  the portion of the lease relating to
         the building has been recorded as a direct financing lease. Accordingly
         costs relating to this component of this lease are not shown.

(h)      Amount represents site improvements and is included in total land value
         for this Property.

(i)      For  financial  reporting  purposes,  the  undepreciated  cost  of  the
         Property in Minnetonka,  Minnesota,  was written down to net realizable
         value  due to an  anticipated  impairment  in  value.  The  Partnership
         recognized  the impairment by recording an allowance for loss on assets
         in the amount of  $197,466  at December  31,  1998.  The tenant of this
         Property  declared  bankruptcy  and rejected the lease relating to this
         Property.   The  impairment  at  December  31,  1998,  represented  the
         difference between the Property's  carrying value at December 31, 1998,
         and the estimated net realizable value of the Property. The cost of the
         Property  presented  on this  schedule is the gross amount at which the
         Property was carried at December 31, 1998,  excluding the allowance for
         loss on assets.  No  additional  impairment  was  recorded for the year
         ended December 31, 2000 and 1999.

(j)      For  financial  reporting  purposes,  the  undepreciated  cost  of  the
         Property in  Timonium,  Maryland,  was written  down to net  realizable
         value due to an impairment in value.  The  Partnership  recognized  the
         impairment  by recording an allowance  for loss on assets in the amount
         of  $280,372 at December  31,  2000.  The  impairment  represented  the
         difference between the Property's  carrying value and the estimated net
         realizable  value of the Property at December 31, 2000. The cost of the
         Property  presented  on this  schedule is the gross amount at which the
         Property was carried at December 31, 2000,  excluding the allowance for
         loss on assets.

(k)      For financial reporting  purposes,  during 2000, the undepreciated cost
         of the Property in San Antonio, Texas, was reduced to its estimated net
         realizable  value due to an  impairment  in value.  The  tenant of this
         Property  vacated  the  Property  and  ceased  restaurant   operations,
         resulting in a reclassification of the building portion of the lease to
         an  operating  lease.  The  building was recorded at net book value and
         depreciated  over its remaining  estimated life of  approximately  27.1
         years.

(l)      For  financial  reporting  purposes,  the  undepreciated  cost  of  the
         Property in Raleigh, North Carolina, was written down to net realizable
         value due to an impairment in value.  The  Partnership  recognized  the
         impairment  by recording an allowance  for loss on assets in the amount
         of  $272,945 at December  31,  2000.  The  impairment  represented  the
         difference between the Property's  carrying value and the estimated net
         realizable  value of the Property at December 31, 2000. The cost of the
         Property  presented  on this  schedule is the gross amount at which the
         Property was carried at December 31, 2000,  excluding the allowance for
         loss on assets.




<PAGE>
























                                    EXHIBITS




<PAGE>




                                  EXHIBIT INDEX


Exhibit Number

**3.1    Affidavit and  Certificate  of Limited  Partnership  of CNL Income Fund
         XVIII,  Ltd.  (Filed  as  Exhibit  3.2  to  Registrant's   Registration
         Statement  on  Form  S-11,  No.  33-90998-01,  incorporated  herein  by
         reference.)

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

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

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

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

**5.1    Opinion of Baker & Hostetler as to the legality of the securities being
         registered  by CNL Income  Fund  XVIII,  Ltd.  (Filed as Exhibit 5.2 to
         Amendment No. Three to the Registrant's Registration Statements on Form
         S-11, No. 33-90998, incorporated herein by reference.)

**8.1    Opinion of Baker &  Hostetler  regarding  certain  material  tax issues
         relating  to CNL Income  Fund  XVIII,  Ltd.  (Filed as  Exhibit  8.2 to
         Amendment No. Three to the Registrant's  Registration Statement on Form
         S-11, No. 33-90998, incorporated herein by reference.)

**8.2    Opinion of Baker & Hostetler regarding certain material issues relating
         to the Distribution  Reinvestment  Plan of CNL Income Fund XVIII,  Ltd.
         (Filed  as  Exhibit  8.4 to  Amendment  No.  Three to the  Registrant's
         Registration Statement on Form S-11, No. 33-90998,  incorporated herein
         by reference.)

**8.3    Amended Opinion of Baker & Hostetler  regarding certain material issues
         relating  to CNL Income  Fund  XVIII,  Ltd.  (Filed as  Exhibit  8.5 to
         Post-Effective  Amendment  No.  Four to the  Registrant's  Registration
         Statement on Form S-11, No.33-90998, incorporated herein by reference.)

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

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

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

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


<PAGE>




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

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

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

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

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

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

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

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

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


**previously filed