<PAGE>

                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

       (X)        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT of 1934

               For the quarterly period ended      September 30, 1999
                                              -----------------------------

                                       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
                                     0-23968
                     ---------------------------------------


                           CNL Income Fund XIII, Ltd.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


          Florida                                           59-3143094
----------------------------------------------   -------------------------------
(State or other jurisdiction of                         (I.R.S. Employer
incorporation or organization)                         Identification No.)


450 South Orange Avenue
Orlando, Florida                                              32801
----------------------------------------------   -------------------------------
(Address of principal executive offices)                    (Zip Code)


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


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for 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
                                       -----    -----
<PAGE>

                                   CONTENTS





Part I                                                                    Page
                                                                          ----
   Item 1.    Financial Statements:

                  Condensed Balance Sheets                                1

                  Condensed Statements of Income                          2

                  Condensed Statements of Partners' Capital               3

                  Condensed Statements of Cash Flows                      4

                  Notes to Condensed Financial Statements                 5-6

   Item 2.    Management's Discussion and Analysis of Financial
                  Condition and Results of Operations                     7-15

   Item 3.   Quantitative and Qualitative Disclosures About Market
                  Risk                                                    15

Part II

   Other Information                                                      16-17
<PAGE>

<TABLE>
<CAPTION>
                                   CNL INCOME FUND XIII, LTD.
                                 (A Florida Limited Partnership)
                                    CONDENSED BALANCE SHEETS


                                                                            September 30,            December 31,
                                                                                 1999                    1998
                                                                          -------------------     -------------------
<S>                                                                       <C>                     <C>
                               ASSETS
                               ------

Land and buildings on operating leases, less accumulated
  depreciation of $2,282,439 and $2,107,624 in 1999 and
  1998, respectively, and allowance for loss on building
  of $297,885 in 1999 and 1998                                               $ 21,691,429            $ 22,945,358
Net investment in direct financing leases                                       7,484,021               6,951,890
Investment in joint ventures                                                    2,444,595               2,451,336
Cash and cash equivalents                                                       1,788,157                 766,859
Receivables, less allowance for doubtful
  accounts of $532 in 1998                                                         42,643                 121,119
Prepaid expenses                                                                   13,884                   8,453
Lease costs, less accumulated
  amortization of $1,338 in 1999                                                   34,412                  17,875
Accrued rental income                                                           1,527,632               1,424,603
                                                                       -------------------     -------------------

                                                                             $ 35,026,773            $ 34,687,493
                                                                       ===================     ===================

               LIABILITIES AND PARTNERS' CAPITAL
               ---------------------------------

Accounts payable                                                             $    180,768            $      4,068
Accrued construction costs payable                                                816,500                      --
Accrued and escrowed real estate taxes payable                                      9,863                   6,923
Distributions payable                                                             850,002                 850,002
Due to related parties                                                             12,614                  22,529
Rents paid in advance and deposits                                                 40,444                  54,568
                                                                       -------------------     -------------------
    Total liabilities                                                           1,910,191                 938,090

Commitments and Contingencies (Note 4)

Partners' capital                                                              33,116,582              33,749,403
                                                                       -------------------     -------------------

                                                                             $ 35,026,773            $ 34,687,493
                                                                       ===================     ===================
</TABLE>



            See accompanying notes to condensed financial statements.

                                       1
<PAGE>

                          CNL INCOME FUND XIII, LTD.
                        (A Florida Limited Partnership)
                        CONDENSED STATEMENTS OF INCOME


<TABLE>
<CAPTION>
                                                                   Quarter Ended                   Nine Months Ended
                                                                   September 30,                     September 30,
                                                               1999             1998             1999             1998
                                                           ------------     ------------     ------------     -------------
<S>                                                        <C>              <C>              <C>              <C>
Revenues:
    Rental income from operating leases                      $ 587,142        $ 583,183       $1,783,785       $1,815,609
    Adjustments to accrued rental income                            --            3,713               --         (307,405)
    Earned income from direct financing leases                 209,450          174,129          599,396          589,349
    Contingent rental income                                    65,207           72,309          175,450          213,317
    Interest and other income                                   14,860            8,081           27,853           41,267
                                                           ------------     ------------     ------------     -------------
                                                               876,659          841,415        2,586,484        2,352,137
                                                           ------------     ------------     ------------     -------------

Expenses:
    General operating and administrative                        31,750           44,235          106,324          114,819
    Professional services                                       13,223            5,089           34,831           19,724
    Management fees to related party                             8,962            8,472           26,739           26,246
    Real estate taxes                                               --           67,472           13,319           70,360
    State and other taxes                                           --               --           21,476           16,184
    Depreciation and amortization                               96,446          115,760          297,117          312,173
    Transaction costs                                           60,630               --          174,513               --
                                                           ------------     ------------     ------------     -------------
                                                               211,011          241,028          674,319          559,506
                                                           ------------     ------------     ------------     -------------

Income Before Equity in Earnings of Joint
    Ventures, Gain on Sale of Land and Building and
    Loss on Demolition of Building                             665,648          600,387        1,912,165        1,792,631

Equity in Earnings of Joint Ventures                            60,592           60,864          181,146          182,346

Gain on Sale of Land and Building                              176,159               --          176,159               --

Loss on Demolition of Building                                      --               --         (352,285)              --
                                                           ------------     ------------     ------------     -------------

Net Income                                                   $ 902,399        $ 661,251       $1,917,185       $1,974,977
                                                           ============     ============     ============     =============

Allocation of Net Income:
    General partners                                         $   8,393        $   6,613         $ 20,421       $   19,750
    Limited partners                                           894,006          654,638        1,896,764        1,955,227
                                                           ------------     ------------     ------------     -------------

                                                             $ 902,399        $ 661,251       $1,917,185       $1,974,977
                                                           ============     ============     ============     =============

Net Income Per Limited Partner Unit                          $    0.22        $    0.16       $     0.47       $     0.49
                                                           ============     ============     ============     =============

Weighted Average Number of Limited Partner
    Units Outstanding                                        4,000,000        4,000,000        4,000,000        4,000,000
                                                           ============     ============     ============     =============
</TABLE>

            See accompanying notes to condensed financial statements.

                                       2
<PAGE>

                          CNL INCOME FUND XIII, LTD.
                        (A Florida Limited Partnership)
                   CONDENSED STATEMENTS OF PARTNERS' CAPITAL


<TABLE>
<CAPTION>
                                               Nine Months Ended          Year Ended
                                                 September 30,           December 31,
                                                      1999                   1998
                                               ------------------     ----------------
<S>                                            <C>                    <C>
General partners:
    Beginning balance                            $       163,874       $      137,207
    Net income                                            20,421               26,667
                                               ------------------     ----------------
                                                         184,295              163,874
                                               ------------------     ----------------

Limited partners:
    Beginning balance                                 33,585,529           34,516,349
    Net income                                         1,896,764            2,469,188
    Distributions ($0.64 and $0.85 per
       limited partner unit, respectively)            (2,550,006)          (3,400,008)
                                               ------------------     ----------------
                                                      32,932,287           33,585,529
                                               ------------------     ----------------

Total partners' capital                          $    33,116,582       $   33,749,403
                                               ==================     ================
</TABLE>

            See accompanying notes to condensed financial statements.

                                       3
<PAGE>

                          CNL INCOME FUND XIII, LTD.
                        (A Florida Limited Partnership)
                      CONDENSED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                  Nine Months Ended
                                                                    September 30,
                                                              1999                1998
                                                       ----------------     ---------------
<S>                                                    <C>                  <C>
Increase (Decrease) in Cash and Cash Equivalents

    Net Cash Provided by Operating Activities               $2,529,681          $2,459,747
                                                       ----------------     ---------------

    Cash Flows from Investing Activities:
       Payment of lease costs                                  (17,875)                 --
       Proceeds from sale of land and building               1,059,498                  --
                                                       ----------------     ---------------
          Net cash provided by investing activities          1,041,623                  --
                                                       ----------------     ---------------

    Cash Flows from Financing Activities:
       Distributions to limited partners                    (2,550,006)         (2,550,006)
                                                       ----------------     ---------------
              Net cash used in financing activities         (2,550,006)         (2,550,006)
                                                       ----------------     ---------------

Net Increase (Decrease) in Cash and Cash Equivalents         1,021,298             (90,259)

Cash and Cash Equivalents at Beginning of Period               766,859             907,980
                                                       ----------------     ---------------

Cash and Cash Equivalents at End of Period                  $1,788,157          $  817,721
                                                       ================     ===============

Supplemental Schedule of Non-Cash Investing
    and Financing Activities:

       Distributions declared and unpaid at end of
          period                                             $ 850,002          $  850,002
                                                       ================     ===============

       Construction costs incurred and unpaid at
          end of period                                      $ 816,500          $       --
                                                       ================     ===============
</TABLE>

            See accompanying notes to condensed financial statements.

                                       4
<PAGE>

                          CNL INCOME FUND XIII, LTD.
                        (A Florida Limited Partnership)
                   NOTES TO CONDENSED FINANCIAL STATEMENTS
          Quarters and Nine Months Ended September 30, 1999 and 1998


1.       Basis of Presentation:
         ---------------------

         The accompanying unaudited condensed financial statements have been
         prepared in accordance with the instructions to Form 10-Q and do not
         include all of the information and note disclosures required by
         generally accepted accounting principles. The financial statements
         reflect all adjustments, consisting of normal recurring adjustments,
         which are, in the opinion of management, necessary to a fair statement
         of the results for the interim periods presented. Operating results for
         the quarter and nine months ended September 30, 1999, may not be
         indicative of the results that may be expected for the year ending
         December 31, 1999. Amounts as of December 31, 1998, included in the
         financial statements, have been derived from audited financial
         statements as of that date.

         These unaudited financial statements should be read in conjunction with
         the financial statements and notes thereto included in Form 10-K of CNL
         Income Fund XIII, Ltd. (the "Partnership") for the year ended December
         31, 1998.

2.       Land and Buildings:
         ------------------

         In November 1998, the Partnership entered into a new lease for the
         property in Tampa, Florida with a new tenant to operate the property as
         a Steak-n-Shake restaurant. In connection with the new lease agreement,
         during the nine months ended September 30, 1999, the building located
         on the Partnership's property was demolished. As a result, the
         undepreciated cost of the building of $352,285 was charged to net
         income for financial reporting purposes. As of September 30, 1999, a
         new building had been constructed and was operational.

         In July 1999, the Partnership sold its property in Houston, Texas to a
         third party for $1,073,887 and received net sales proceeds of
         $1,059,498, resulting in a gain of $176,159 for financial reporting
         purposes. This property was originally acquired by the Partnership in
         August 1993 and had a cost of approximately $861,300, excluding
         acquisition fees and miscellaneous acquisition expenses; therefore, the
         Partnership sold the property for approximately $198,200 in excess of
         its original purchase price.

2.       Related Party Transactions:
         --------------------------

         On September 1, 1999, CNL American Properties Fund, Inc. ("APF"), an
         affiliate of the general partners, acquired CNL Fund Advisors, Inc.
         ("CFA"), an affiliate who provides certain services relating to
         management of the Partnership and its properties pursuant to a
         management agreement with the Partnership. As a result of this
         acquisition, CFA became a wholly owned subsidiary of APF; however, the
         terms of the management agreement between the Partnership and CFA
         remain unchanged and in effect.

                                       5
<PAGE>

                          CNL INCOME FUND XIII, LTD.
                        (A Florida Limited Partnership)
                   NOTES TO CONDENSED FINANCIAL STATEMENTS
          Quarters and Nine Months Ended September 30, 1999 and 1998


4.       Commitments and Contingencies:
         -----------------------------

         On March 11, 1999, the Partnership entered into an Agreement and Plan
         of Merger with CNL American Properties Fund, Inc. ("APF"), pursuant to
         which the Partnership would be merged with and into a subsidiary of APF
         (the "Merger"). As consideration for the Merger, APF has agreed to
         issue 1,943,093 shares of its common stock, par value $0.01 per share
         (the "APF Shares"). In order to assist the general partners in
         evaluating the proposed merger consideration, the general partners
         retained Valuation Associates, a nationally recognized real estate
         appraisal firm, to appraise the Partnership's restaurant property
         portfolio. Based on Valuation Associates' appraisal, the fair value of
         the Partnership's property portfolio and other assets was $38,283,180
         as of December 31, 1998. The APF Shares are expected to be listed for
         trading on the New York Stock Exchange concurrently with the
         consummation of the Merger, and therefore, would be freely tradable at
         the option of the former limited partners. At a special meeting of the
         partners that is expected to be held in the first quarter of 2000,
         limited partners holding in excess of 50% of the Partnership's
         outstanding limited partnership interests must approve the Merger prior
         to consummation of the transaction. If the limited partners at the
         special meeting approve the Merger, APF will own the properties and
         other assets of the Partnership. The general partners intend to
         recommend that the limited partners of the Partnership approve the
         Merger. In connection with their recommendation, the general partners
         will solicit the consent of the limited partners at the special
         meeting. If the limited partners reject the Merger, the Partnership
         will bear the portion of the transaction costs based upon the
         percentage of "For" votes and the general partners will bear the
         portion of such transaction costs based upon the percentage of
         "Against" votes and abstentions.

         On May 11, 1999, four limited partners in several of the CNL Income
         Funds served a lawsuit against the general partners and APF in
         connection with the proposed Merger. On July 8, 1999, the plaintiffs
         amended the complaint to add three additional limited partners as
         plaintiffs. Additionally, on June 22, 1999, a limited partner in
         certain of the CNL Income Funds served a lawsuit against the general
         partners, APF, CNL Fund Advisors, Inc. and certain of its affiliates in
         connection with the proposed Merger. On September 23, 1999, the judge
         assigned to the two lawsuits entered an order consolidating the two
         cases. Pursuant to this order, the plaintiffs in these cases filed a
         consolidated and amended complaint on November 8, 1999. The various
         defendants, including the general partners, have 45 days to respond to
         that consolidated complaint. The general partners and APF believe that
         the lawsuits are without merit and intend to defend vigorously against
         the claims. See Part II - Item 1. Legal Proceedings.

         In May 1999, the Partnership entered into a new lease for the property
         in Philadelphia, Pennsylvania, with a new tenant to operate the
         property as an Arby's restaurant. In connection therewith, the
         Partnership agreed to pay up to $433,000 in renovation costs, $216,500
         of which have been incurred and accrued as of September 30, 1999.

                                       6
<PAGE>

ITEM 2.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
             RESULTS OF OPERATIONS

         CNL Income Fund XIII, Ltd. (the "Partnership") is a Florida limited
partnership that was organized on September 25, 1992, to acquire for cash,
either directly or through joint venture arrangements, both newly constructed
and existing restaurants, 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 and family-style 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
September 30, 1999, the Partnership owned 46 Properties, which included
interests in two Properties owned by joint ventures in which the Partnership is
a co-venturer and three Properties owned with affiliates of the general partners
as tenants-in-common.

Capital Resources
-----------------

         The Partnership's primary source of capital for the nine months ended
September 30, 1999 and 1998 was cash from operations (which includes cash
received from tenants, distributions from joint ventures, and interest and other
income received, less cash paid for expenses). Cash from operations was
$2,529,681 and $2,459,747 for the nine months ended September 30, 1999 and 1998,
respectively. The increase in cash from operations for the nine months ended
September 30, 1999, as compared to the nine months ended September 30, 1998, was
primarily a result of changes in income and expenses as described in "Results of
Operations" below and changes in the Partnership's working capital.

         Other sources and uses of capital included the following during the
nine months ended September 30, 1999.

         In November 1998, the Partnership entered into a new lease for the
Property located in Tampa, Florida with a new tenant to operate the Property as
a Steak-n-Shake restaurant. In connection with the new lease agreement, during
the nine months ended September 30, 1999, the building located on the
Partnership's Property was demolished. As a result, the undepreciated cost of
the building of $352,285 was charged to net income for financial reporting
purposes. As of September 30, 1999, a new building had been constructed and was
operational. In connection with the new lease, the Partnership agreed to pay up
to $600,000 in renovation costs relating to this Property, all of which have
been incurred and accrued as of September 30, 1999. The Partnership will use a
portion of the net sales proceeds from the sale of the Property in Houston,
Texas, to pay such costs, as described below.

         In May 1999, the Partnership entered into a new lease for the Property
in Philadelphia, Pennsylvania, with a tenant to operate the Property as an
Arby's restaurant. In connection with the lease, the Partnership agreed to pay
up to $433,000 in renovation costs relating to this Property, $216,500 of which
have been incurred and accrued as of September 30, 1999. The Partnership intends
to use a portion of the net sales proceeds from the sale of the Property in
Houston, Texas, to pay such costs, as described below.

         In July 1999, the Partnership sold its Property in Houston, Texas, to a
third party for $1,073,887 and received net sales proceeds of $1,059,498,
resulting in a gain of $176,159 for financial reporting purposes. This Property
was originally acquired by the Partnership in August

                                       7
<PAGE>

1993, and had a cost of approximately $861,300, excluding acquisition fees and
miscellaneous acquisition expenses; therefore, the Partnership sold the Property
for approximately $198,200 in excess of its original purchase price. The
Partnership intends to use the net sales proceeds to pay for the renovation
costs described above. The Partnership anticipates that it will distribute
amounts sufficient to enable the limited partners to pay federal and state
income taxes, if any (at a level reasonably assumed by the general partners),
resulting from the sale.

         Currently, rental income from the Partnership's Properties and any net
sales proceeds from the sale of Properties, pending the use of such proceeds to
pay construction and renovation costs as described above, are invested in money
market accounts or other short-term, highly liquid investments such as demand
deposits at commercial banks, certificates of deposit, and money markets with
less than a 30-day maturity date. At September 30, 1999, the Partnership had
$1,788,157 invested in such short-term investments, as compared to $766,859 at
December 31, 1998. The increase in cash and cash equivalents is primarily
attributable to the receipt of net sales proceeds relating to the sale of the
Property in Houston, Texas, as described above. The funds remaining at September
30, 1999 will be used to pay distributions, construction costs relating to two
Properties, as described above and other liabilities.

Short-Term Liquidity
--------------------

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

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

         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 operating expenses of the Partnership, to the extent that
the general partners determine that such funds are available for distribution.
Based on current and future anticipated cash from operations, the Partnership
declared distributions to the limited partners of $2,550,006 for each of the
nine months ended September 30, 1999 and 1998 ($850,002 for each of the quarters
ended September 30, 1999 and 1998). This represents distributions of $0.64 per
unit for each of he nine months ended September 30, 1999 and 1998 ($0.21 per
unit for each of the quarters ended September 30, 1999 and 1998). No
distributions were made to the general partners for the quarters and nine months
ended September 30, 1999 and 1998. No amounts distributed to the limited
partners for the nine months ended September 30, 1999 and 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.

         Total liabilities of the Partnership, including distributions payable,
increased to $1,910,191 at September 30, 1999, from $938,090 at December 31,
1998, partially as a result of the Partnership accruing construction costs
relating to the Steak-n-Shake and Arby's Properties as described above. Total
liabilities also increased as a result of the Partnership accruing

                                       8
<PAGE>

transaction costs relating to the proposed merger with CNL American Properties
Fund, Inc. ("APF"), as described below in "Results of Operations". Liabilities
at September 30, 1999, to the extent they exceed cash and cash equivalents at
September 30, 1999, will be paid from future cash from operations or in the
event the general partners elect to make capital contributions or loans, from
future general partner contributions or loans.

Long-Term Liquidity
-------------------

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

Results of Operations
---------------------

         During the nine months ended September 30, 1998, the Partnership owned
and leased 42 wholly owned Properties and during the nine months ended September
30, 1999, the Partnership owned and leased 42 wholly owned Properties (including
one Property in Houston, Texas, which was sold in July 1999) to operators of
fast-food and family-style restaurant chains. During the nine months ended
September 30, 1999 and 1998, the Partnership earned $2,383,181 and $2,097,553,
respectively, in rental income from operating leases (net of adjustments to
accrued rental income) and earned income from direct financing leases from these
Properties, $796,592 and $761,025 of which was earned during the quarters ended
September 30, 1999 and 1998, respectively. Rental and earned income was lower
during the nine months ended September 30, 1998, as compared to the nine months
ended September 30, 1999, due to the fact that in June 1998, Long John Silver's,
Inc. filed for bankruptcy and rejected the leases relating to three of the eight
Properties it leased and ceased making rental payments on the three rejected
leases. As a result, during the nine months ended September 30, 1998, the
Partnership wrote off approximately $307,400 in accrued rental income (non-cash
accounting adjustments relating to the straight-lining of future scheduled rent
increases over the lease term in accordance with generally accepted accounting
principles) relating to these Properties. No amounts were written-off during the
nine months ended September 30, 1999. The effect from the write-off of accrued
rental income was partially offset by the fact that the Partnership recorded
rental and earned income during the nine months ended September 30, 1998, prior
to the tenant vacating the Properties in June 1998. No rental and earned income
was recognized during the nine months ended September 30, 1999 from the former
tenant. In August 1999, Long John Silver's, Inc. assumed and affirmed its five
remaining leases, and the Partnership has continued receiving rental payments
relating to these five leases.

         Rental and earned income increased during the quarter and nine months
ended September 30, 1999, by approximately $66,200 and $151,400, respectively,
due to the fact that the Partnership re-leased two Properties which were
rejected by Long John Silver's, Inc. to new tenants with rental payments
commencing in December 1998 and June 1999. In addition, in May 1999, the
Partnership re-leased the remaining vacant Property to a new tenant, and intends
to renovate the Property into an Arby's restaurant, as described above in
"Capital Resources."

         The increase in rental and earned income during the quarter and nine
months ended September 30, 1999, was partially offset by a reduction in rental
and earned income of approximately $20,500 as a result of the sale of the
Property in Houston, Texas, as described above in "Capital Resources".

                                       9
<PAGE>

         During the nine months ended September 30, 1999 and 1998, the
Partnership also earned $175,450 and $213,317, respectively, in contingent
rental income, $65,207 and $72,309 of which was earned during the quarters ended
September 30, 1999 and 1998, respectively. Contingent rental income was higher
during the quarter and nine months ended September 30, 1998, as compared to the
quarter and nine months ended September 30, 1999, due to the fact that during
the quarter and nine months ended September 30, 1998, the Partnership recorded
additional contingent rental amounts as a result of adjusting estimated
contingent rental amounts accrued at December 31, 1997, to actual amounts.

         During the nine months ended September 30, 1999 and 1998, the
Partnership also owned and leased two Properties indirectly through joint
venture arrangements and three Properties with affiliates of the general
partners as tenants-in-common. In connection therewith, during the nine months
ended September 30, 1999 and 1998, the Partnership earned $181,146 and $182,346,
respectively, $60,592 and $60,864 of which was earned during the quarters ended
September 30, 1999 and 1998, respectively.

         Operating expenses, including depreciation and amortization expense,
were $674,319 and $559,506 for the nine months ended September 30, 1999 and
1998, respectively, of which $211,011 and $241,028 were incurred for the
quarters ended September 30, 1999 and 1998, respectively. The increase in
operating expenses during the nine months ended September 30, 1999, was
primarily due to, and the decrease during the quarter ended September 30, 1999,
was partially offset by, the fact that the Partnership incurred $60,630 and
$174,513 during the quarter and nine months ended September 30, 1999,
respectively, in transaction costs related to the general partners retaining
financial and legal advisors to assist them in evaluating and negotiating the
proposed merger with APF, as described below. If the limited partners reject the
merger, the Partnership will bear the portion of the transaction costs based
upon the percentage of "For" votes and the general partners will bear the
portion of such transaction costs based upon the percentage of "Against" votes
and abstentions.

         The increase in operating expenses during the nine months ended
September 30, 1999, as compared to the nine months ended September 30, 1998, was
partially offset by, and the decrease during the quarter ended September 30,
1999, was partially attributable to, the fact that operating expenses were
higher in 1998 due to an increase in insurance, legal fees and real estate tax
expenses as a result of Long John Silver's, Inc. filing for bankruptcy and
rejecting the leases relating to three Properties in June 1998, as described
above. During 1998, the Partnership entered into new leases with new tenants for
two of the three vacant Properties, to operate the Properties as a Lions Choice
restaurant and a Steak-n-Shake restaurant. In addition, in May 1999, the
Partnership re-leased the remaining Property to a new tenant and intends to
renovate the Property into an Arby's restaurant, as described above in "Capital
Resources." In accordance with the lease agreements, the new tenant of the Lions
Choice Property became responsible for real estate taxes, insurance and
maintenance relating to this Property during 1998 and the new tenants of the
Arby's and Steak-n-Shake Properties became responsible for these expenses in May
and June 1999, respectively. Due to the fact that Long John Silver's, Inc.
assumed and affirmed its five remaining leases, as described above, Long John
Silver's, Inc. will be responsible for real estate taxes, insurance, and
maintenance relating to these Properties; therefore, the general partners do not
anticipate that the Partnership will incur these expenses for these Properties
in the future.

                                       10
<PAGE>

         In addition, the increase in operating expenses during the nine months
ended September 30, 1999, was partially offset by, and the decrease during the
quarter ended September 30, 1999 was partially attributable to, a decrease in
operating expenses as a result of a decrease in depreciation expense due to the
sale of the Property in Houston, Texas, as described above.

         As a result of the fact that the Partnership demolished the building
related the Property in Houston, Texas, during the nine months ended September
30, 1999, the Partnership recorded a loss on demolition of $352,285 for
financial reporting purposes. In addition, as a result of the sale of the
Property during the quarter and nine months ended September 30, 1999, as
described above in "Capital Resources," the Partnership recognized a gain of
$176,159 for financial reporting purposes. No Properties were sold or demolished
during the quarter and nine months ended September 30, 1998.

Proposed Merger
---------------

         On March 11, 1999, the Partnership entered into an Agreement and Plan
of Merger with CNL American Properties Fund, Inc. ("APF"), pursuant to which the
Partnership would be merged with and into a subsidiary of APF (the "Merger"). As
consideration for the Merger, APF has agreed to issue 1,943,093 shares of its
common stock, par value $0.01 per share (the "APF Shares"). In order to assist
the general partners in evaluating the proposed merger consideration, the
general partners retained Valuation Associates, a nationally recognized real
estate appraisal firm, to appraise the Partnership's restaurant property
portfolio. Based on Valuation Associates' appraisal, the fair value of the
Partnership's property portfolio and other assets was $38,283,180 as of December
31, 1998. The APF Shares are expected to be listed for trading on the New York
Stock Exchange concurrently with the consummation of the Merger, and therefore,
would be freely tradable at the option of the former limited partners. At a
special meeting of the partners that is expected to be held in the first quarter
of 2000, limited partners holding in excess of 50% of the Partnership's
outstanding limited partnership interests must approve the Merger prior to
consummation of the transaction. If the limited partners at the special meeting
approve the Merger, APF will own the properties and other assets of the
Partnership. The general partners intend to recommend that the limited partners
of the Partnership approve the Merger. In connection with their recommendation,
the general partners will solicit the consent of the limited partners at the
special meeting. If the limited partners reject the Merger, the Partnership will
bear the portion of the transaction costs based upon the percentage of "For"
votes and the general partners will bear the portion of such transaction costs
based upon the percentage of "Against" votes and abstentions.

         On May 11, 1999, four limited partners in several of the CNL Income
Funds served a lawsuit against the general partners and APF in connection with
the proposed Merger. On July 8, 1999, the plaintiffs amended the complaint to
add three additional limited partners as plaintiffs. Additionally, on June 22,
1999, a limited partner in certain of the CNL Income Funds served a lawsuit
against the general partners, APF, CNL Fund Advisors, Inc. and certain of its
affiliates in connection with the proposed Merger. On September 23, 1999, the
judge assigned to the two lawsuits entered an order consolidating the two cases.
Pursuant to this order, the plaintiffs in these cases filed a consolidated and
amended complaint on November 8, 1999. The various defendants, including the
general partners, have 45 days to respond to that consolidated complaint. The
general partners and APF believe that the lawsuits are without merit and intend
to defend vigorously against the claims. See Part II - Item 1. Legal
Proceedings.

                                       11
<PAGE>

Year 2000 Readiness Disclosure
------------------------------

Overview of Year 2000 Problem

         The year 2000 problem concerns the inability of information and
non-information technology systems to properly recognize and process date
sensitive information beyond January 1, 2000. The failure to accurately
recognize the year 2000 could result in a variety of problems from data
miscalculations to the failure of entire systems.

Information and Non-Information Technology Systems

         The Partnership does not have any information or non-information
technology systems. The general partners and their affiliates provide all
services requiring the use of information and non-information technology systems
pursuant to a management agreement with the Partnership. The information
technology system of the general partners' affiliates consists of a network of
personal computers and servers built using hardware and software from mainstream
suppliers. The non-information technology systems of the affiliates are
primarily facility related and include building security systems, elevators,
fire suppressions, HVAC, electrical systems and other utilities. The affiliates
have no internally generated programmed software coding to correct, because
substantially all of the software utilized by the affiliates is purchased or
licensed from external providers. The maintenance of non-information technology
systems at the Partnership's restaurant properties is the responsibility of the
tenants of such properties in accordance with the terms of the Partnership's
leases.

The Y2K Team

         In early 1998, the general partners and their affiliates formed a Year
2000 committee (the "Y2K Team") for the purpose of identifying, understanding
and addressing the various issues associated with the year 2000 problem. The Y2K
Team consists of the general partners and members from their affiliates,
including representatives from senior management, information systems,
telecommunications, legal, office management, accounting and property
management.

Assessing Year 2000 Readiness

         The Y2K Team's initial step in assessing year 2000 readiness consisted
of identifying any systems that are date-sensitive and, accordingly, could have
potential year 2000 problems. The Y2K Team has conducted inspections, interviews
and tests to identify which of the systems used by the Partnership could have a
potential year 2000 problem.

         The information system of the general partners' affiliates is comprised
of hardware and software applications from mainstream suppliers. Accordingly,
the Y2K Team has contacted and is evaluating documentation from the respective
vendors and manufacturers to verify the year 2000 compliance of their products.
The Y2K Team has also requested and is evaluating documentation from the
non-information technology systems providers of the affiliates.

         In addition, the Y2K Team has requested and is evaluating documentation
from other companies with which the Partnership has material third party
relationships. Such third parties, in addition to the providers of information
and non-information technology systems, consist of the Partnership's transfer
agent and financial institutions. The Partnership depends on its transfer

                                       12
<PAGE>

agent to maintain and track investor information and its financial institutions
for availability of cash.

         As of September 30, 1999, the Y2K Team had received responses from
approximately 62 percent of the third parties. All of the responses were in
writing. Of the third parties responding, all indicated that they are currently
year 2000 compliant or will be year 2000 compliant prior to the year 2000.
Although the Y2K Team continues to receive positive responses from the companies
with which the Partnership has third party relationships regarding their year
2000 compliance, the general partners cannot be assured that the third parties
have adequately considered the impact of the year 2000.

         In addition, the Y2K Team has requested documentation from the
Partnership's tenants. As of September 30, 1999, the Y2K Team had received
responses from approximately 73 percent of the tenants. All of the responses
were in writing. Of the tenant's responding, all indicated that they are
currently year 2000 compliant or will be year 2000 compliant prior to the year
2000. The general partners cannot be assured that the tenants have adequately
considered the impact of the year 2000. The Partnership has also instituted a
policy of requiring any new tenants to indicate that their systems are year 2000
compliant or are expected to be year 2000 compliant prior to the year 2000.

Achieving Year 2000 Compliance

         The Y2K Team has identified and completed upgrades for its hardware
equipment that was not year 2000 compliant. In addition, the Y2K Team has
identified and completed upgrades of the software applications that were not
year 2000 compliant, although the general partners cannot be assured that the
upgrade solutions provided by the vendors have addressed all possible year 2000
issues.

         The cost for these upgrades and other remedial measures is the
responsibility of the general partners and their affiliates. The general
partners do not expect that the Partnership will incur any costs in connection
with year 2000 remedial measures.

Assessing the Risks to the Partnership of Non-Compliance and Developing
Contingency Plans

Risk of Failure of Information and Non-Information Technology Systems Used by
the Partnership

         The general partners believe that the reasonably likely worst case
scenario with regard to the information and non-information technology systems
used by the Partnership is the failure of one or more of these systems as a
result of year 2000 problems. Because the Partnership's major source of income
is rental payments under long-term triple-net leases, any failure of information
or non-information technology systems used by the Partnership is not expected to
have a material impact on the results of operations of the Partnership. Even if
such systems failed, the payment of rent under the Partnership's leases would
not be affected. In addition, the Y2K Team is expected to correct any Y2K
problems within the control of the general partners and their affiliates before
the year 2000.

         The Y2K Team has determined that a contingency plan to address this
risk is not necessary at this time. However, if the Y2K Team identifies
additional risks associated with the

                                       13
<PAGE>

year 2000 compliance of the information or non-information technology systems
used by the Partnership, the Y2K Team will develop a contingency plan if deemed
necessary at that time.

Risk of Inability of Transfer Agent to Accurately Maintain Partnership Records

         The general partners believe that the reasonably likely worst case
scenario with regard to the Partnership's transfer agent is that the transfer
agent will fail to achieve year 2000 compliance of its systems and will not be
able to accurately maintain the records of the Partnership. This could result in
the inability of the Partnership to accurately identify its limited partners for
purposes of distributions, delivery of disclosure materials and transfer of
units. The Y2K Team has received certification from the Partnership's transfer
agent of its year 2000 compliance. Despite the positive response from the
transfer agent, the general partners cannot be assured that the transfer agent
has addressed all possible year 2000 issues.

         The Y2K Team has developed a contingency plan pursuant to which the
general partners and their affiliates would maintain the records of the
Partnership manually, in the event that the systems of the transfer agent are
not year 2000 compliant. The general partners and their affiliates would have to
allocate resources to internally perform the functions of the transfer agent.
The general partners do not anticipate that the additional cost of these
resources would have a material impact on the results of operations of the
Partnership.

Risk of Loss of Short-Term Liquidity from Failure of Financial Institutions to
Achieve Year 2000 Compliance

         The general partners believe that the reasonably likely worst case
scenario with regard to the Partnership's financial institutions is that some or
all of its funds on deposit with such financial institutions may be temporarily
unavailable. The Y2K Team has received responses from 93% of the Partnership's
financial institutions indicating that their systems are currently year 2000
compliant or are expected to be year 2000 compliant prior to the year 2000.
Despite the positive responses from the financial institutions, the general
partners cannot be assured that the financial institutions have addressed all
possible year 2000 issues. The loss of short-term liquidity could affect the
Partnership's ability to pay its expenses on a current basis. The general
partners do not anticipate that a loss of short-term liquidity would have a
material impact on the results of operations of the Partnership.

         Based upon the responses received from the Partnership's financial
institutions and the inability of the Y2K Team to identify a suitable
alternative for the deposit of funds that is not subject to potential year 2000
problems, the Y2K Team has determined not to develop a contingency plan to
address this risk.

Risks of Late Payment or Non-Payment of Rent by Tenants

         The general partners believe that the reasonably likely worst case
scenario with regard to the Partnership's tenants is that some of the tenants
may make rental payments late as the result of the failure of the tenants to
achieve year 2000 compliance of their systems used in the payment of rent, the
failure of the tenant's financial institutions to achieve year 2000 compliance,
or the temporary disruption of the tenants' businesses. The Y2K Team is in the
process of requesting responses from the Partnership's tenants indicating the
extent to which their systems are currently year 2000 compliant or are expected
to be year 2000 compliant prior to the year

                                       14
<PAGE>

2000. The general partners cannot be assured that the tenants have addressed all
possible year 2000 issues. The late payment of rent by one or more tenants would
affect the results of operations of the Partnership in the short-term.

         The general partners are also aware of predictions that the year 2000
problem, if uncorrected, may result in a global economic crisis. The general
partners are not able to determine if such predictions are true. A widespread
disruption of the economy could affect the ability of the Partnership's tenants
to pay rent and, accordingly, could have a material impact on the results of
operations of the Partnership.

         Because payment of rent is under the control of the Partnership's
tenants, the Y2K Team is not able to develop a contingency plan to address these
risks. In the event of late payment or non-payment of rent, the general partners
will assess the remedies available to the Partnership under its lease
agreements.

ITEM 3.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         Not applicable.

                                       15
<PAGE>

                                   PART II. OTHER INFORMATION


Item 1.           Legal Proceedings.

                  On May 11, 1999, four limited partners in several CNL Income
                  Funds served a derivative and purported class action lawsuit
                  filed April 22, 1999 against the general partners and APF in
                  the Circuit Court of the Ninth Judicial Circuit of Orange
                  County, Florida, alleging that the general partners breached
                  their fiduciary duties and violated provisions of certain of
                  the CNL Income Fund partnership agreements in connection with
                  the proposed Merger. The plaintiffs are seeking unspecified
                  damages and equitable relief. On July 8, 1999, the plaintiffs
                  filed an amended complaint which, in addition to naming three
                  additional plaintiffs, includes allegations of aiding and
                  abetting and conspiring to breach fiduciary duties, negligence
                  and breach of duty of good faith against certain of the
                  defendants and seeks additional equitable relief. As amended,
                  the caption of the case is Jon Hale, Mary J. Hewitt, Charles
                                             ---------------------------------
                  A. Hewitt, Gretchen M. Hewitt Bernard J. Schulte, Edward M.
                  -----------------------------------------------------------
                  and Margaret Berol Trust, and Vicky Berol v. James M. Seneff,
                  -------------------------------------------------------------
                  Jr., Robert A. Bourne, CNL Realty Corporation, and CNL
                  ------------------------------------------------------
                  American Properties Fund, Inc., Case No. CIO-99-0003561.
                  -------------------------------

                  On June 22, 1999, a limited partner of several CNL Income
                  Funds served a purported class action lawsuit filed April 29,
                  1999 against the general partners and APF, Ira Gaines,
                                                             -----------
                  individually and on behalf of a class of persons similarly
                  ----------------------------------------------------------
                  situated, v. CNL American Properties Fund, Inc., James M.
                  ---------------------------------------------------------
                  Seneff, Jr., Robert A. Bourne, CNL Realty Corporation, CNL
                  ----------------------------------------------------------
                  Fund Advisors, Inc., CNL Financial Corporation a/k/a CNL
                  --------------------------------------------------------
                  Financial Corp., CNL Financial Services, Inc. and CNL Group,
                  ------------------------------------------------------------
                  Inc., Case NO. CIO-99-3796, in the Circuit Court of the Ninth
                  -----
                  Judicial Circuit of Orange County, Florida, alleging that the
                  general partners breached their fiduciary duties and that APF
                  aided and abetted their breach of fiduciary duties in
                  connection with the proposed Merger. The plaintiff is seeking
                  unspecified damages and equitable relief.

                  On September 23, 1999, Judge Lawrence Kirkwood entered an
                  order consolidating the two cases under the caption In re: CNL
                                                                      ----------
                  Income Funds Litigation, Case No. 99-3561. Pursuant to this
                  -----------------------------------------
                  order, the plaintiffs in these cases filed a consolidated and
                  amended complaint on November 8, 1999, and the various
                  defendants, including the general partners, have 45 days to
                  respond to that consolidated complaint.

Item 2.           Changes in Securities.  Inapplicable.
                  ----------------------

Item 3.           Default upon Senior Securities.  Inapplicable.
                  -------------------------------

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

Item 5.           Other Information. Inapplicable.
                  ------------------

                                       16
<PAGE>

Item 6.           Exhibits and Reports on Form 8-K.
                  ---------------------------------
                  (a)      Exhibits

                           2.1      Agreement and Plan of Merger by and between
                                    the Registrant and CNL American Properties
                                    Fund, Inc. ("APF") dated March 11, 1999, as
                                    amended June 4, 1999, and as amended October
                                    27, 1999 (Filed as Appendix B to the
                                    Prospectus Supplement for the Registrant,
                                    constituting a part of Amendment No. 3 to
                                    the Registration Statement of APF on Form
                                    S-4, File No. 333-74329.)

                           3.1      Affidavit and Certificate of Limited
                                    Partnership of CNL Income Fund XIII, Ltd.
                                    (Included as Exhibit 3.1 to Registration
                                    Statement No. 33-53672 on Form S-11 and
                                    incorporated herein by reference.)

                           4.1      Affidavit and Certificate of Limited
                                    Partnership of CNL Income Fund XIII, Ltd.
                                    (Included as Exhibit 3.1 to Registration
                                    Statement No. 33-53672 on Form S-11 and
                                    incorporated herein by reference.)

                           4.2      Amended and Restated Agreement of Limited
                                    Partnership of CNL Income Fund XIII, Ltd.
                                    (Included as Exhibit 4.2 to Form 10-K filed
                                    with the Securities and Exchange Commission
                                    on March 31, 1994, and incorporated herein
                                    by reference.)

                           10.1     Management Agreement between CNL Income Fund
                                    XIII, Ltd. and CNL Investment Company
                                    (Included as Exhibit 10.1 to Form 10-K filed
                                    with the Securities and Exchange Commission
                                    on March 31, 1994, and incorporated herein
                                    by reference.)

                           10.2     Assignment of Management Agreement from CNL
                                    Investment Company to CNL Income Fund
                                    Advisors, Inc. (Included as Exhibit 10.2 to
                                    Form 10-K filed with the Securities and
                                    Exchange Commission on March 30, 1995, and
                                    incorporated herein by reference.)

                           10.3     Assignment of Management Agreement from CNL
                                    Income Fund Advisors, Inc. to CNL Fund
                                    Advisors, Inc. (Included as Exhibit 10.5 to
                                    Form 10-K filed with the Securities and
                                    Exchange Commission on April 1, 1996, and
                                    incorporated herein by reference.)

                           27       Financial Data Schedule (Filed herewith.)

                  (b)      Reports on Form 8-K

                           No reports on Form 8-K were filed during the quarter
                           ended September 30, 1999.

                                       17
<PAGE>

                                           SIGNATURES
                                           ----------


         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

         DATED this 10th day of November, 1999.


                                     By:  CNL INCOME FUND XIII, LTD.
                                          General Partner


                                          By:  /s/ James M. Seneff, Jr.
                                               ---------------------------------
                                               JAMES M. SENEFF, JR.
                                               Chief Executive Officer
                                               (Principal Executive Officer)


                                          By:  /s/ Robert A. Bourne
                                               ---------------------------------
                                               ROBERT A. BOURNE
                                               President and Treasurer
                                               (Principal Financial and
                                                Accounting Officer)