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

                                    FORM 10-K

(Mark One)

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

                   For the fiscal year ended December 31, 2003

                                       OR

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

                        For the transition period from to


                         Commission file number 0-23968

                           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 Identification No.)
 incorporation or organization)

                             450 South Orange Avenue
                             Orlando, Florida 32801
          (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]

         Indicate by check mark whether the registrant is an  accelerated  filer
(as defined in Exchange Act Rule 12b-2): Yes___ No_X_

         Aggregate market value of the voting stock held by nonaffiliates of the
registrant:  The registrant registered an offering of 4,000,000 units of limited
partnership  interest  (the  "Units") on Form S-11 under the  Securities  Act of
1933, as amended. Since no established market for such Units exists, there is no
market  value for such  Units.  Each Unit was  originally  sold at $10 per Unit.

                   DOCUMENTS INCORPORATED BY REFERENCE:
                                      None

<PAGE>



                                     PART I


Item 1.  Business

         CNL Income Fund XIII, Ltd. (the "Registrant" or the "Partnership") is a
limited  partnership  which was  organized  pursuant to the laws of the State of
Florida on  September  25, 1992.  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  March  31,  1993,  the
Partnership offered for sale up to $40,000,000 of limited partnership  interests
(the  "Units")  (4,000,000  Units at $10 per Unit)  pursuant  to a  registration
statement on Form S-11 under the Securities  Act of 1933, as amended,  effective
March 17, 1993.  The offering  terminated  on August 26, 1993, at which date the
maximum  offering  proceeds of $40,000,000  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 and family-style  restaurant chains
(the "Restaurant Chains").  Net proceeds to the Partnership from its offering of
Units,  after  deduction  of  organizational  and  offering  expenses,   totaled
$35,324,831.  The net  offering  proceeds  were used to acquire  47  Properties,
including ten Properties  consisting of only land, two Properties owned by joint
ventures in which the Partnership is a co-venturer, and one Property acquired as
tenants-in-common  with affiliates of the General  Partners,  to pay acquisition
fees  to an  affiliate  of the  General  Partners  totaling  $2,200,000,  to pay
miscellaneous  acquisition  expenses and to establish a working  capital reserve
for Partnership purposes.

         As of December 31, 2000, the  Partnership  owned 46 Properties,  either
directly or indirectly through joint venture or tenancy in common  arrangements.
During the year ended  December 31, 2001, the  Partnership  sold its Property in
Mount Airy, North Carolina,  to the tenant and reinvested the net sales proceeds
in a Golden Corral Property located in Blue Springs, Missouri, with an affiliate
of the General Partners as tenants-in-common. During the year ended December 31,
2002, the  Partnership  sold its  Properties in Dayton,  Ohio and Overland Park,
Kansas,  and reinvested the majority of the net sales proceeds in two Properties
located  in  Houston,  Texas  and  Lee's  Summit,  Missouri.  During  2003,  the
Partnership  used the  remaining  net sales  proceeds  from the 2002 sale of the
Property  in Dayton,  Ohio to invest in a Property in Tucker,  Georgia  with CNL
Income Fund X, Ltd., CNL Income Fund XIV, Ltd., and CNL Income Fund XV, Ltd., as
tenants-in-common.  Each of the CNL Income  Funds is an affiliate of the General
Partners and a Florida limited partnership.

         As of December 31, 2003, the  Partnership  owned 47 Properties.  The 47
Properties  include eight Properties  consisting of land only,  interests in two
Properties owned by joint ventures in which the Partnership is a co-venturer and
five Properties owned with affiliates as tenants-in-common.  Under the leases of
the eight  Properties  consisting  of land only,  the tenant owns the  buildings
currently on the land and has the right,  if not in default under the lease,  to
remove  the  buildings  from  the  land  at  the  end of the  lease  terms.  The
Partnership  generally  leases the  Properties  on a  triple-net  basis with the
lessees responsible for all repairs and maintenance,  property taxes,  insurance
and utilities.

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

Leases

         Although there are variations in the specific terms of the leases,  the
following  is  a  summarized   description  of  the  general  structure  of  the
Partnership's  leases. The leases of the Properties owned by the Partnership and
joint ventures in which the Partnership is a co-venturer and Properties owned as
tenants-in-common  with affiliates of the General  Partners  provide for initial
terms  ranging  from 5 to 20 years  (the  average  being 18  years),  and expire
between 2004 and 2023. 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 of the  Properties  provide for minimum  base annual
rental payments  (payable in monthly  installments)  ranging from  approximately
$30,600 to $222,500. A 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,  the annual base rent
required under the terms of the lease will increase.

         Generally,  the  leases  of the  Properties  provide  for  two to  five
five-year  renewal  options  subject  to the same  terms and  conditions  as the
initial lease.  Lessees of 37 of the  Partnership's 47 Properties also have been
granted  options to purchase  the  Property at the  Property's  then fair market
value after a specified portion of the lease term has elapsed. Fair market value
will be determined through an appraisal by an independent  appraisal firm. Under
the  terms  of  certain  leases,   the  option  purchase  price  may  equal  the
Partnership's  original  cost to purchase  the Property  (including  acquisition
costs),  plus a specified  percentage  from the date of the lease or a specified
percentage of the  Partnership's  purchase price, if that amount is greater than
the Property's fair market value at the time the purchase option is exercised.

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

         During 2003, the Partnership used the remaining net sales proceeds from
the sale of the  Property  in Dayton,  Ohio to invest in a  Property  in Tucker,
Georgia, with CNL Income Fund X, Ltd., CNL Income Fund XIV, Ltd., and CNL Income
Fund XV,  Ltd.,  as  tenants-in-common.  The lease terms for this  Property  are
substantially the same as the Partnership's other leases.

         In  January  2001,  the  leases  relating  to the  Properties  in Mesa,
Arizona,  and Peoria,  Arizona,  were assigned to another  tenant and amended to
provide for a reduction in rents for a two-year  period.  In December  2002, the
leases  were  amended  to provide  for a  reduction  in rents for an  additional
six-month period. All other lease terms remained unchanged. The General Partners
do not  anticipate  that any  decreases  in  rental  income,  relating  to these
amendments,  will have a material adverse effect on the Partnership's  financial
position or results of operations.

         In December 2002, AmeriKing Corporation, the parent company to National
Restaurant Enterprises, Inc., which is the tenant of the Property in Cincinnati,
Ohio,  filed for bankruptcy  protection.  In January 2004, the lease relating to
the  Property  was  assigned  to and assumed by a new tenant and all other lease
terms remained the same.

         In March 2004, the tenant of the Property in Houston,  Texas terminated
its lease,  in accordance  with its lease  agreement,  when more than 50% of the
land was  taken by a partial  right-of-way  taking.  The  General  Partners  are
currently seeking either a new tenant or a purchaser for the vacant Property.

Major Tenants

         During 2003,  three lessees of the Partnership,  Flagstar  Enterprises,
Inc., Long John Silver's, Inc., and Golden Corral Corporation,  each contributed
more than ten percent of total  rental  revenues  (including  the  Partnership's
share of total  rental  revenues  from  Properties  owned by joint  ventures and
Properties  owned with affiliates of the General  Partners as  tenants-in-common
arrangements).  As of December  31,  2003,  Flagstar  Enterprises,  Inc. was the
lessee under leases relating to 11 restaurants, Long John Silver's, Inc. was the
lessee under leases relating to five restaurants,  and Golden Corral Corporation
was the lessee  under leases  relating to four  restaurants.  It is  anticipated
that, based on the minimum rental payments  required by the leases,  these three
lessees will each continue to  contribute  more than ten percent of total rental
revenues in 2004. In addition,  three  Restaurant  Chains,  Long John  Silver's,
Hardee's,  and Golden Corral Buffet and Grill ("Golden Corral"),  each accounted
for more than ten percent of total rental  revenues  during 2003  (including the
Partnership's  share of total rental  revenues  from  Properties  owned by joint
ventures  and  Properties  owned with  affiliates  of the  General  Partners  as
tenants-in-common  arrangements).  It is anticipated that these three Restaurant
Chains each will  continue to account for more than ten percent of total  rental
revenues under the terms of the leases in 2004. Any failure of these lessees or

<PAGE>


         Restaurant Chains will materially  affect the  Partnership's  operating
results if the  Partnership  is not able to re-lease the  Properties in a timely
manner. As of December 31, 2003, no single tenant or group of affiliated tenants
leases  Properties  with an aggregate  carrying value in excess of 20 percent of
the total assets of the Partnership.

Joint Venture and Tenancy in Common Arrangements

         The  Partnership  has  entered  into the  following  joint  venture and
tenancy in common arrangements as of December 31, 2003:
<TABLE>
<CAPTION>

 <c>
         Entity Name             Year      Ownership               Partners                   Property

Attalla Joint Venture            1993       50.00 %     CNL Income Fund XIV, Ltd.        Attalla, AL

CNL Income Fund II, Ltd.,  and   1994       66.13 %     CNL Income Fund II, Ltd.         Arvada, CO
     CNL  Income   Fund  XIII,
     Ltd., Tenants in Common

Salem Joint Venture              1995       27.80%      CNL Income Fund XIV, Ltd.        Salem, OH

CNL Income  Fund  XIII,  Ltd.,   1997       63.09%      CNL Income Fund XVII, Ltd.       Akron, OH
     and   CNL   Income   Fund
     XVII,  Ltd.,  Tenants  in
     Common

CNL  Income  Fund  III,  Ltd.,   1997       47.83%      CNL Income Fund III, Ltd.        Miami, FL
     CNL   Income   Fund  VII,                          CNL Income  Fund  VII, Ltd.
     Ltd.,  CNL Income Fund X,                          CNLIncome Fund X, Ltd.
     Ltd.,   and  CNL   Income
     Fund XIII, Ltd.,  Tenants
     in Common

CNL Income  Fund  XIII,  Ltd.,   2001       41.00%      CNL Income Fund XV, Ltd.         Blue Springs,
     and CNL  Income  Fund XV,                                                           MO
     Ltd., Tenants in Common

CNL Income  Fund X, Ltd.,  CNL   2003       10.00%      CNL Income Fund X, Ltd.          Tucker, GA
     Income  Fund XIII,  Ltd.,                          CNL Income Fund XIV, Ltd.
     CNL   Income   Fund  XIV,                          CNL Income Fund XV, Ltd.
     Ltd.,   and  CNL   Income
     Fund  XV,  Ltd.,  Tenants
     in Common
</TABLE>

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

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

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

         During 2003, the Partnership used the remaining net sales proceeds from
the sale of the  Property  in Dayton,  Ohio to invest in a  Property  in Tucker,
Georgia, as tenants-in-common with CNL Income Fund X, Ltd., CNL Income Fund XIV,
Ltd.,  and CNL Income  Fund XV, Ltd.  Each CNL Income Fund is a Florida  limited
partnership and an affiliate of the General Partner.

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

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

Certain Management Services

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

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

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

Competition

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

Employees

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


Item 2.  Properties

         As of December 31, 2003, the Partnership owned 47 Properties. Of the 47
Properties, 40 are owned by the Partnership in fee simple, two are owned through
joint  venture  arrangements  and five  are  owned  through  tenancy  in  common
arrangements.  See Item 1.  Business  - Joint  Venture  and  Tenancy  in  Common
Arrangements.  The Partnership is not permitted to encumber its Properties under
the terms of its partnership agreement.

Description of Properties

         Land.  The  Partnership's  Property  sites,  owned  either  directly or
indirectly,  range from  approximately  19,900 to 145,400  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,
either directly or indirectly, as of December 31, 2003 by state.

                 State                                    Number of Properties

                 Alabama                                              3
                 Arizona                                              2
                 Arkansas                                             1
                 California                                           1
                 Colorado                                             1
                 Florida                                             10
                 Georgia                                              2
                 Indiana                                              1
                 Louisiana                                            1
                 Maryland                                             1
                 Missouri                                             2
                 Ohio                                                 3
                 Pennsylvania                                         3
                 South Carolina                                       2
                 Tennessee                                            5
                 Texas                                                9
                                                                  ------
                 TOTAL PROPERTIES                                    47
                                                                  ======

         Buildings.  Each of the Properties includes a building that is one of a
Restaurant Chain's approved designs. However, the buildings located on the eight
Checkers  Properties are owned by the tenant while the land parcels are owned by
the  Partnership.  The buildings  generally are  rectangular and are constructed
from various  combinations of stucco,  steel, wood, brick and tile. The sizes of
the buildings owned by the Partnership range from approximately  1,900 to 11,500
square feet.  All buildings on Properties  are  freestanding  and  surrounded by
paved  parking  areas.  Buildings  are suitable for  conversion to various uses,
although  modifications  may be required prior to use for other than  restaurant
operations. As of December 31, 2003, the Partnership had no plans for renovation
of  the  Properties.   Depreciation   expense  is  computed  for  buildings  and
improvements using the straight-line method using a depreciable life of 40 years
for federal income tax purposes.

         As of December 31, 2003, the aggregate cost of the Properties  owned by
the  Partnership  and joint ventures  (including  the  Properties  owned through
tenancy in common  arrangements) for federal income tax purposes was $31,225,186
and $8,388,631, respectively.

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

               Restaurant Chain                       Number of Properties

                Arby's                                             3
                Burger King                                        4
                Checkers                                           8
                Chevy's Fresh Mex                                  1
                Denny's                                            3
                Golden Corral                                      4
                Hardee's                                          11
                Jack in the Box                                    4
                Long John Silver's                                 5
                O'Charley's                                        1
                Steak-N-Shake                                      1
                Taco Cabana                                        1
                Wendy's                                            1
                                                                -----
                TOTAL PROPERTIES                                  47
                                                                =====

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

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

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

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

 <c>
                                      2003              2002             2001              2000              1999
                                  --------------    -------------    --------------    -------------     -------------

Rental Revenues (1)                 $ 3,821,735     $ 3,656,162       $ 3,768,826       $3,753,973        $3,727,854
Properties                                   47              46                46               46                46
Average Rent Per Property                81,314          79,482        $   81,931         $ 81,608          $ 81,040
Occupancy Rate                             100%            100%              100%             100%              100%
</TABLE>

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


<PAGE>


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

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

          2004                               1           $     29,494                   0.82%
          2005                              --                     --                      --
          2006                              --                     --                      --
          2007                               1                 34,800                   0.97%
          2008                               2                347,428                   9.67%
          2009                               2                247,790                   6.90%
          2010                               2                130,126                   3.62%
          2011                               3                264,682                   7.37%
          2012                               1                100,960                   2.81%
          2013                              17              1,357,661                  37.78%
          Thereafter                        17              1,080,617                  30.06%
                                  -------------     ------------------    --------------------
          Totals (1)                        46      $       3,593,558                 100.00%
                                  =============     ==================    ====================
</TABLE>

(1)      Excludes one lease that was terminated in 2004.

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

         Flagstar Enterprises,  Inc. leases 11 Hardee's restaurants. The initial
term of each lease is 20 years  (expiring in 2013) and the average  minimum base
annual rent is  approximately  $65,800  (ranging from  approximately  $54,700 to
$73,600).

         Long John Silver's,  Inc.  leases five Long John Silver's  restaurants.
The  initial  term for four of the leases is 20 years  (expiring  in 2013).  The
initial  term of the fifth  lease,  which the  Partnership  assumed from a third
party in  connection  with the  acquisition  of the related  Property,  was five
years;  the tenant of the property  exercised its option to extend the lease for
an additional five years  beginning on May 2002 (expiring in 2007).  The average
minimum base annual rent is approximately  $81,600  (ranging from  approximately
$34,800 to $118,100).

         Golden Corral  Corporation leases four Golden Corral  restaurants.  The
initial term of each lease is 15 years (expiring  between 2008 and 2015) and the
average  minimum  base  annual  rent is  approximately  $190,000  (ranging  from
approximately $168,600 to $222,600).


Item 3. Legal Proceedings

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


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

         Not applicable.



<PAGE>


                                     PART II


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

(a)      As of March 12, 2004,  there were 3,025 holders of record of the Units.
There is no public trading market for the Units,  and it is not anticipated that
a public market for the Units will develop.  During 2003,  Limited  Partners who
wished to sell their Units may have  offered the Units for sale  pursuant to the
Partnership's  distribution reinvestment plan (the "Plan"), and Limited Partners
who wished to have their  distributions used to acquire additional Units (to the
extent Units were  available  for  purchase),  may have done so pursuant to such
Plan. The General Partners have the right to prohibit  transfers of Units.  From
inception  through  December 31, 2003,  the price paid for any Unit  transferred
pursuant to the Plan ranged from $8.67 to $9.50 per Unit. The price paid for any
Unit  transferred  other than pursuant to the Plan was subject to negotiation by
the purchaser and the selling Limited  Partner.  The Partnership will not redeem
or repurchase Units.

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

 <c>
                                                2003(1)                                    2002(1)
                                 ---------------------------------------    ---------------------------------------
                                   High           Low          Average        High           Low          Average
                                 ----------    ----------     ----------    ----------    ----------     ----------
    First Quarter                   $ 8.86        $ 6.00         $ 7.84        $ 9.50        $ 6.00         $ 7.95
    Second Quarter                    8.27          6.69           7.45          7.09          7.05           7.07
    Third Quarter                     9.88          7.39           8.22          9.50          6.00           8.86
    Fourth Quarter                    9.50          6.92           9.03          6.00          6.00           6.00
</TABLE>

(1)      A total of 33,114 and 59,780 Units were transferred other than pursuant
         to  the  Plan  for  the  years  ended   December  31,  2003  and  2002,
         respectively.

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

         For each of the years ended December 31, 2003 and 2002, the Partnership
declared cash distributions of $3,400,008 to the Limited Partners. Distributions
of $850,002  were  declared at the close of each of the  Partnership's  calendar
quarters  during 2003 and 2002 to the Limited  Partners.  These amounts  include
monthly  distributions  made in arrears  for the  Limited  Partners  electing to
receive such distributions on this basis. No amounts  distributed to the Limited
Partners  for the years ended  December  31, 2003 and 2002 are required to be or
have been  treated by the  Partnership  as a return of capital  for  purposes of
calculating   the   Limited   Partners'   return  on  their   adjusted   capital
contributions. No distributions have been made to the General Partners to date.

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

(b)     Not applicable.


<PAGE>



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

 <c>
                                         2003              2002             2001              2000              1999
                                     --------------    -------------    --------------    -------------     -------------
Year ended December 31:
  Continuing Operations :
      Revenues                          $ 3,345,719      $ 3,283,796       $3,187,169       $3,329,371        $3,230,159
      Equity in earnings of
         unconsolidated joint
         ventures                           318,869          307,776          309,381          244,344           242,158
      Income from continuing
         operations  (1)                  2,837,812        2,811,166        2,622,897        2,872,443         2,461,171

  Discontinued Operations :
      Revenues                                   --          306,464          241,295          244,380           247,417
      Income from and gain on
         disposal of
         discontinued
         operations (2)                          --          521,378          212,924          216,854           219,994

    Net income                            2,837,812        3,332,544        2,835,821        3,089,297         2,681,165

  Income per unit:
   Continuing operations                  $    0.71        $    0.70         $   0.66         $   0.72          $   0.62
   Discontinued operations                       --             0.13             0.05             0.05              0.05
                                     --------------    -------------    --------------    -------------     -------------
                                          $    0.71        $    0.83         $   0.71         $   0.77          $   0.67
                                     ==============    =============    ==============    =============     =============

   Cash distributions declared          $ 3,400,008      $ 3,400,008       $3,400,008      $ 3,400,008        $3,400,008

   Cash distributions
      declared per unit                        0.85             0.85             0.85             0.85              0.85

   At December 31:
   Total assets                        $ 32,611,793     $ 33,142,001      $33,149,433      $33,848,645       $34,337,261
   Total partners' capital               31,526,002       32,088,198       32,155,662       32,719,849        33,030,560
</TABLE>

(1)      Income from  continuing  operations  for the years ended  December  31,
         2003,  2001,  and 2000  includes  provisions  for  write-down of assets
         $57,915,  $56,506,  and $51,618,  respectively.  Income from continuing
         operations  for the year ended  December 31,  1999,  includes a loss on
         removal  of  building  of  $352,285  and a gain on sale  of  assets  of
         $176,159.

(2)      Income  from and gain on disposal of  discontinued  operations  for the
         year ended  December 31, 2002 include a provisions  for  write-down  of
         assets of $105,193 and a gain on disposal of discontinued operations of
         $330,476.

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

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


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

         The  Partnership  was  organized on September  25, 1992, to acquire for
cash,  either  directly  or  through  joint  venture  arrangements,  both  newly
constructed  and  existing  restaurant  Properties,  as well as land upon  which
restaurant  Properties  were to be  constructed  and to be leased  primarily  to
operators of Restaurant Chains. The leases are generally triple-net leases, with
the lessee  generally  responsible  for all  repairs and  maintenance,  property
taxes, insurance and utilities.

         The leases provide for minimum base annual rental  amounts  (payable in
monthly  installments)  ranging  from  approximately  $30,600 to  $222,500.  The
majority of the leases provide for percentage  rent, based on sales in excess of
a specified amount. In addition,  some of the leases provide that, commencing in
specified  lease years  (generally  the sixth lease year),  the annual base rent
required under the terms of the lease will increase.

         As of December 31, 2002 and 2001, the  Partnership  owned 40 Properties
directly  and six  Properties  indirectly  through  joint  venture or tenancy in
common  arrangements.  As  of  December  31,  2003,  the  Partnership  owned  40
Properties  directly and seven  Properties  indirectly  through joint venture or
tenancy in common arrangements.

Capital Resources

         For the years  ended  December  31,  2003,  2002,  and 2001,  cash from
operating activities was $3,400,909,  $3,614,895, and $3,302,832,  respectively.
The decrease in cash from operating activities during 2003, as compared to 2002,
resulted from changes in income and expenses, such as changes in rental revenues
and changes in operating  and Property  related  expenses.  The increase in cash
from  operating  activities  during  2002,  as compared to 2001,  resulted  from
changes in the Partnership's working capital, such as the timing of transactions
relating to the  collection  of  receivables  and the payment of  expenses,  and
changes in income and expenses,  such as changes in rental  revenues and changes
in operating and Property related expense.

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

         In April 2001, the Partnership  sold its Property in Mount Airy,  North
Carolina and received net sales proceeds of approximately  $947,000.  Due to the
fact that during 2001 the  Partnership  had previously  recorded a provision for
write-down  of  assets  for  this  Property,  no  additional  gain or  loss  was
recognized  upon sale. In April 2001, the Partnership  reinvested  approximately
$882,300 of these sales  proceeds in a Property in Blue  Springs,  Missouri,  as
tenants-in-common,  with CNL Income Fund XV, Ltd. ("CNL XV"), a Florida  limited
partnership  and an affiliate of the General  Partners.  The Partnership and CNL
XV, as tenants-in-common, acquired this Property from CNL BB Corp., an affiliate
of the General Partners.  The affiliate had purchased and temporarily held title
to the Property in order to facilitate  the  acquisition  of the Property by the
Partnership  and CNL XV, as  tenants-in-common.  The purchase  price paid by the
Partnership and CNL XV, as tenants-in-common,  represented the costs incurred by
the affiliate to acquire the Property.  The  Partnership  owns a 41% interest in
the profits and losses of the Property.

         In April 2002, the  Partnership  recorded a provision for write-down of
assets of $105,193 in anticipation of the sale of the Property in Overland Park,
Kansas.  The provision  represented  the  difference  between the Property's net
carrying  value and its estimated fair value.  In August 2002,  the  Partnership
sold  this  Property  to a third  party  and  received  net  sales  proceeds  of
$1,094,300  resulting  in a gain  on  disposal  of  discontinued  operations  of
approximately $27,300. In September 2002 the Partnership reinvested the majority
of these net  sales  proceeds  in a  Property  in Lee's  Summit,  Missouri.  The
Partnership acquired this Property from CNL Net Lease Investors, L.P. ("NLI") at
an approximate  cost of $951,000.  During 2002,  and prior to the  Partnership's
acquisition of this Property,  CNL Financial LP Holding,  LP ("CFN") and CNL Net
Lease Investors GP Corp. ("GP Corp")  purchased the limited  partner's  interest
and general partner's interest, respectively, of NLI. Prior to this transaction,
an affiliate of the Partnership's  General Partners owned a 0.1% interest in NLI
and served as a general  partner of NLI.  The original  general  partners of NLI
waived their rights to benefit from this transaction. The acquisition price paid
by CFN for the limited partner's interest was based on the portfolio acquisition
price. The Partnership acquired the property in Lee's Summit,  Missouri at CFN's
cost and did not pay any additional  compensation  to CFN for the acquisition of
this  property.  Each CNL entity is an  affiliate of the  Partnership's  General
Partners.

         In June 2002, the Partnership sold its Property in Dayton,  Ohio to the
tenant and received net sales proceeds of approximately  $1,049,900 resulting in
a gain on disposal of discontinued operations of approximately $303,200. In June
2002 the  Partnership  reinvested  the majority of these net sales proceeds in a
Property in Houston,  Texas.  The  Partnership  acquired  this Property from CNL
Funding  2001-A,  LP, a Delaware  limited  partnership  and an  affiliate of the
General Partners at an approximate cost of $918,000.  CNL Funding 2001-A, LP had
purchased and temporarily  held title to the Property in order to facilitate the
acquisition of the Property by the  Partnership.  The purchase price paid by the
Partnership  represented the costs incurred by CNL Funding 2001-A, LP to acquire
and carry the Property.

         In December 2002, AmeriKing Corporation, the parent company to National
Restaurant Enterprises,  Inc. which is the tenant of the Property in Cincinnati,
Ohio,  filed for bankruptcy  protection.  In January 2004, the lease relating to
the Property was assigned to a new tenant and all other lease terms remained the
same.

         In November 2003, the Partnership used the remaining net sales proceeds
from the sale of the Property in Dayton, Ohio to invest in a Property in Tucker,
Georgia, as tenants-in-common with CNL Income Fund X, Ltd., CNL Income Fund XIV,
Ltd.,  and CNL Income Fund XV, Ltd. The  Partnership  contributed  approximately
$153,600 for a 10 percent interest in the Property.

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

         At December 31, 2003, the Partnership  had $1,123,111  invested in cash
and cash  equivalents,  as  compared to  $1,275,846  at December  31,  2002.  At
December  31,  2003 these  funds were held in demand  deposit  and money  market
accounts at  commercial  banks.  The  decrease in cash and cash  equivalents  at
December 31, 2003,  as compared to December 31,  2002,  was  primarily  due to a
reinvestment of the net sales  proceeds,  received during 2002, in an additional
Property in Tucker,  Georgia,  as described  above. As of December 31, 2003, the
average  interest rate earned on the rental income  deposited in demand  deposit
and  money  market  accounts  at  commercial  banks  was less  than one  percent
annually.   The  funds  remaining  at  December  31,  2003,   after  payment  of
distributions  and other  liabilities,  will be used to invest in an  additional
Property, and to invest in an additional Property, and to meet the Partnership's
working capital needs.

Short-Term Liquidity

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

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

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

         Due to low  operating  expenses  and  ongoing  cash flow,  the  General
Partners believe that the Partnership has sufficient working capital reserves at
this time. In addition,  because all leases of the Partnership's  Properties are
on a  triple-net  basis,  it is not  anticipated  that a  permanent  reserve for
maintenance  and  repairs  will be  established  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 additional reserves
if, in their  discretion,  they determine such reserves are required to meet the
Partnership's working capital needs.

         The Partnership  generally  distributes cash from operations  remaining
after the payment of the operating  expenses of the  Partnership,  to the extent
that  the  General  Partners   determine  that  such  funds  are  available  for
distribution. Based on current and, for the year ended December 31, 2001, future
anticipated cash from operations,  the Partnership declared distributions to the
Limited  Partners of $3,400,008  for each of the years ended  December 31, 2003,
2002 and 2001. This represents  distributions  of $0.85 per Unit for each of the
years.  No amounts  distributed  to the  Limited  Partners  for the years  ended
December 31, 2003, 2002 and 2001, are required to be or have been treated by the
Partnership  as a return of capital  for  purposes  of  calculating  the Limited
Partners'  return  on their  adjusted  capital  contributions.  The  Partnership
intends to continue to make  distributions of cash available for distribution to
the Limited Partners on a quarterly basis.

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

         As of December  31, 2003 and 2002,  the  Partnership  owed  $17,178 and
$20,593,  respectively,  to affiliates  for operating  expenses,  accounting and
administrative  services,  and  management  fees.  As of  March  12,  2004,  the
Partnership had reimbursed the affiliates for these amounts.  Other liabilities,
including  distributions payable,  increased to $1,068,613 at December 31, 2003,
from  $1,033,210  at December 31, 2002,  primarily as a result of an increase in
rents paid in advance.  The General  Partners  believe that there is  sufficient
cash on hand to meet current working capital needs.

Off-Balance Sheet Transactions

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

Contractual Obligations, Contingent Liabilities, and Commitments

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

Long-Term Liquidity

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

Critical Accounting Policies

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

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

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

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

Results of Operations

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

         Rental revenues from continuing operations were $3,114,071 for the year
ended  December  31, 2003 as compared  to  $3,008,601  during the same period of
2002. The increase in rental revenues from continuing operations during 2003, as
compared  to the same  period  of 2002,  was  primarily  due to the  Partnership
reinvesting  the  majority  of the net  proceeds  from  the  2002  sales  of the
Properties  in Dayton,  Ohio,  and Overland  Park,  Kansas in two  Properties in
Houston, Texas and Lee's Summit, Missouri.

         During the years ended December 31, 2003 and 2002, the Partnership also
earned $229,967 and $269,673,  respectively,  in contingent  rental income.  The
decrease in contingent rental income during 2003 was also due to the Partnership
recording  lower  contingent   rental  income  relating  to  the  Properties  in
Pineville,  Louisiana; Peoria, Arizona; Mesa, Arizona; and Panama City, Florida,
whose tenants experienced financial difficulties.

         During the years  ended  December  31, 2003 and 2002,  the  Partnership
earned  $318,869  and  $307,776,  respectively,  attributable  to the net income
earned by joint  ventures.  Net income earned by joint ventures  during 2003, as
compared to 2002,  remained fairly constant as there was no change in the leased
Property  portfolio  owned by the joint  ventures and  tenancies in common other
than the  investment  in a Property in November 2003 as  tenants-in-common  with
affiliates of the General  Partners.  The Partnership has a 10% interest in this
Property.

         During 2003,  three lessees of the Partnership,  Flagstar  Enterprises,
Inc., Long John Silver's, Inc., and Golden Corral Corporation,  each contributed
more than ten percent of the total rental revenues  (including the Partnership's
share of total  rental  revenues  from  Properties  owned by joint  ventures and
Properties  owned with affiliates of the General  Partners as  tenants-in-common
arrangements).  As of December  31,  2003,  Flagstar  Enterprises,  Inc. was the
lessee under leases relating to 11 restaurants, Long John Silver's, Inc. was the
lessee under leases relating to five restaurants,  and Golden Corral Corporation
was the lessee  under leases  relating to four  restaurants.  It is  anticipated
that, based on the minimum rental payments  required by the leases,  these three
lessees will each continue to  contribute  more than ten percent of total rental
revenues in 2004. In addition,  three  Restaurant  Chains,  Long John  Silver's,
Hardee's,  and Golden Corral,  each accounted for more than ten percent of total
rental revenues during 2003 (including the  Partnership's  share of total rental
revenues  from  Properties  owned by joint  ventures and  Properties  owned with
affiliates of the General  Partners as  tenants-in-common  arrangements).  It is
anticipated that these three Restaurant Chains each will continue to account for
more than ten percent of total rental  revenues under the terms of the leases in
2004. Any failure of these lessees or Restaurant  Chains will materially  affect
the  Partnership's  operating results if the Partnership is not able to re-lease
the Properties in a timely manner.

         Operating expenses, including depreciation and amortization expense and
provision for write-down assets,  were $826,776 and $780,406 for the years ended
December 31, 2003 and 2002,  respectively.  The  increase in operating  expenses
during 2003, as compared to 2002,  was  primarily the result of the  Partnership
recording a provision for write-down of assets of approximately $57,900 relating
to the Property in Houston,  Texas.  In March 2004,  the tenant of this Property
terminated its lease, in accordance with its lease agreement, when more than 50%
of the land was taken by a partial right-of-way taking. The General Partners are
currently  seeking  either a new tenant or a purchaser for the vacant  Property.
The increase in operating  expenses during 2003 was also partially  caused by an
increase  in  state  tax  expense  relating  to  several  states  in  which  the
Partnership  conducts business.  The increase in operating expenses during 2003,
was  partially  offset by a decrease in the costs  incurred  for  administrative
expenses for servicing the Partnership and its Properties.

         During the year ended December 31, 2002, the Partnership identified and
sold two  Properties,  one each in Overland  Park,  Kansas and Dayton,  Ohio. In
relation  to these  sales,  the  Partnership  received  net  sales  proceeds  of
approximately  $2,144,200,  resulting  in  gains  on  disposal  of  discontinued
operations of approximately  $330,500.  The Partnership had recorded a provision
for write-down of assets  relating to the Property in Overland  Park,  Kansas of
approximately  $105,200  during the year ended December 31, 2002 in anticipation
of the sale. The provision represented the difference between the Property's net
carrying  value and its estimated  fair value.  The financial  results for these
Properties  are  reflected  as  discontinued   operations  in  the  accompanying
financial statements.

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

         Rental revenues from continuing operations were $3,008,601 for the year
ended  December 31, 2002 as compared to  $2,966,922  in the same period in 2001.
The increase in rental  revenues  from  continuing  operations  during 2002,  as
compared  to the same  period  in 2001,  was  primarily  due to the  Partnership
reinvesting  the  majority  of the net  proceeds  from  the  2002  sales  of the
Properties  in Dayton,  Ohio,  and Overland  Park,  Kansas in two  Properties in
Houston, Texas and Lee's Summit,  Missouri. The increase in rental revenues from
continuing  operations  during 2002, as compared to the same period in 2001, was
partially  offset by the fact that the  Partnership  sold its  Property in Mount
Airy,  North Carolina in April 2001 and reinvested the majority of the net sales
proceeds  in a Property  in Blue  Springs,  Missouri  with an  affiliate  of the
General Partners, as tenants-in-common.

         During the years  ended  December  31, 2002 and 2001,  the  Partnership
earned $269,673 and $195,058,  respectively,  in contingent  rental income.  The
increase in contingent rental income during 2002, as compared to the same period
in 2001,  was primarily  attributable  to an increase in gross sales for certain
restaurant  Properties  whose leases  require the payment of  contingent  rental
income.

         During the years  ended  December  31, 2002 and 2001,  the  Partnership
earned  $307,776  and  $309,381,  respectively,  attributable  to the net income
earned by joint  ventures.  The decrease in net income earned by joint ventures,
during 2002, is due to a decrease in contingent  rental  income  resulting  from
lower gross sales from the restaurant Property in Miami,  Florida,  the lease of
which requires the payment of contingent  rental income.  The  Partnership  owns
approximately  a 48%  interest  in this  Property  as,  tenants-in-common,  with
Florida limited  partnerships which are affiliates of the General Partners.  The
decrease in net income earned by joint ventures  during 2002, as compared to the
same period in 2001,  was partially  offset by the fact that in April 2001,  the
Partnership  used the majority of the net sales proceeds  received from the sale
of its  Property  in Mount  Airy,  North  Carolina,  to acquire an interest in a
Property in Blue Springs,  Missouri.  The Partnership  owns  approximately a 41%
interest in this Property, as tenants-in-common, with CNL Income Fund XV, Ltd.

         During the years ended December 31, 2002 and 2001, the Partnership also
earned $5,522 and $25,189,  respectively, in interest and other income. Interest
and other  income were  higher  during  2001,  as compared to the same period in
2002, primarily due to higher monthly average cash balances during 2001.

         Operating expenses, including depreciation and amortization expense and
provision  for  write-down  of assets,  were $780,406 and $873,653 for the years
ended  December  31, 2002 and 2001,  respectively.  The  decrease  in  operating
expenses  during 2002 was partially  offset by a decrease in the costs  incurred
for  administrative  expenses for servicing the  Partnership and its Properties,
and a decrease in state tax expense.

         Operating  expenses  were also higher  during 2001,  as compared to the
same period of 2002, due to the fact that the  Partnership  recorded a provision
for  write-down  of assets of $56,506  for the  Property  in Mount  Airy,  North
Carolina in March 2001. The provision  represented  the  difference  between the
carrying  value of the Property and its  estimated  fair value.  The decrease in
operating   expenses  during  2002  was  partially  offset  by  an  increase  in
depreciation expense due to Property acquisitions.

         During the year ended December 31, 2002, the Partnership identified and
sold two  Properties,  one each in Overland  Park,  Kansas and Dayton,  Ohio. In
relation  to these  sales,  the  Partnership  received  net  sales  proceeds  of
approximately  $2,144,200,  resulting  in  gains  on  disposal  of  discontinued
operations of approximately  $330,500.  The Partnership had recorded a provision
for write-down of assets  relating to the Property in Overland  Park,  Kansas of
approximately  $105,200  during the year ended December 31, 2002 in anticipation
of the sale. The provision represented the difference between the Property's net
carrying  value and its estimated  fair value.  The financial  results for these
Properties  are  reflected  as  Discontinued   Operations  in  the  accompanying
financial statements.

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

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

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


Item 7a. Quantitative and Qualitative Disclosures About Market Risk

         Not applicable.


Item 8.  Financial Statements and Supplementary Data

<PAGE>


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


                                    CONTENTS






                                                                   Page

        Report of Independent Certified Public Accountants           18

        Financial Statements:

           Balance Sheets                                            19

           Statements of Income                                      20

           Statements of Partners' Capital                           21

           Statements of Cash Flows                               22-23

           Notes to Financial Statements                          24-35



<PAGE>














               Report of Independent Certified Public Accountants



To the Partners
CNL Income Fund XIII, Ltd.



In our opinion,  the accompanying  balance sheets and the related  statements of
income,  of partners'  capital and of cash flows present fairly, in all material
respects,  the  financial  position  of CNL Income  Fund XIII,  Ltd.  (a Florida
limited  partnership)  at  December  31,  2003 and 2002,  and the results of its
operations  and its cash flows for each of the three  years in the period  ended
December 31, 2003 in conformity with accounting principles generally accepted in
the United  States of  America.  In  addition,  in our  opinion,  the  financial
statement  schedules  listed in the index appearing under item 15(a)(2)  present
fairly, in all material respects, the information set forth therein when read in
conjunction with the related financial  statements.  These financial  statements
and 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.

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




/s/ PricewaterhouseCoopers LLP

Orlando, Florida
March 24, 2004

<PAGE>


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

                                 BALANCE SHEETS

<TABLE>
<CAPTION>

 <c>
                                                                                           December 31,
                                                                                2003                        2002
                                                                       -----------------------      ----------------------

                                   ASSETS

Real estate properties with operating leases, net                            $     20,648,573             $    21,048,701
Net investment in direct financing leases                                           5,416,343                   5,561,235
Investment in joint ventures                                                        3,310,368                   3,211,480
Cash and cash equivalents                                                           1,123,111                   1,275,846
Receivables, less allowance for doubtful accounts
     of $69,401 and $3,222 respectively                                                97,948                      76,653
Accrued rental income                                                               1,978,140                   1,932,122
Other assets                                                                           37,310                      35,964
                                                                       -----------------------      ----------------------

                                                                             $     32,611,793             $    33,142,001
                                                                       =======================      ======================



         LIABILITIES AND PARTNERS' CAPITAL


Accounts payable and accrued expenses                                          $       16,519               $       7,851
Real estate taxes payable                                                               5,319                       4,410
Distributions payable                                                                 850,002                     850,002
Due to related parties                                                                 17,178                      20,593
Rents paid in advance                                                                 174,627                     147,147
Deferred rental income                                                                 22,146                      23,800
                                                                       -----------------------      ----------------------
        Total liabilities                                                           1,085,791                   1,053,803



Partners' capital                                                                  31,526,002                  32,088,198
                                                                       -----------------------      ----------------------

                                                                             $     32,611,793             $    33,142,001
                                                                       =======================      ======================
</TABLE>
                See accompanying notes to financial statements.



<PAGE>


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

                              STATEMENTS OF INCOME

<TABLE>
<CAPTION>

 <c>
                                                                                      Year Ended December 31,

                                                                             2003              2002              2001
                                                                        ----------------  ----------------  ---------------
   Revenues
       Rental income from operating leases                                 $  2,533,122       $ 2,456,253      $ 2,387,542
       Earned income from direct financing leases                               580,949           552,348          579,380
       Contingent rental income                                                 229,967           269,673          195,058
       Interest and other income                                                  1,681             5,522           25,189
                                                                        ----------------  ----------------  ---------------
                                                                              3,345,719         3,283,796        3,187,169
                                                                        ----------------  ----------------  ---------------
   Expenses
       General operating and administrative                                     262,190           287,619          313,948
       Property related                                                          12,463            21,509           24,528
       Management fees to related parties                                        37,560            37,535           36,671
       State and other taxes                                                     56,280            38,715           57,457
       Depreciation and amortization                                            400,368           395,028          384,543
       Provision for write-down of assets                                        57,915                --           56,506
                                                                        ----------------  ----------------  ---------------
                                                                                826,776           780,406          873,653
                                                                        ----------------  ----------------  ---------------

   Income before equity in earnings of unconsolidated joint ventures          2,518,943         2,503,390        2,313,516

   Equity in earnings of unconsolidated joint ventures                          318,869           307,776          309,381
                                                                        ----------------  ----------------  ---------------

   Income from continuing operations                                          2,837,812         2,811,166        2,622,897
                                                                        ----------------  ----------------  ---------------

   Discontinued operations
       Income from discontinued operations                                           --           190,902          212,924
       Gain on disposal of discontinued operations                                   --           330,476               --
                                                                        ----------------  ----------------  ---------------
                                                                                     --           521,378          212,924
                                                                        ----------------  ----------------  ---------------

   Net income                                                              $  2,837,812       $ 3,332,544      $ 2,835,821
                                                                        ================  ================  ===============

   Income per limited partner unit:
       Continuing operations                                                 $     0.71         $    0.70        $    0.66
       Discontinued operations                                                       --              0.13             0.05
                                                                        ----------------  ----------------  ---------------

                                                                             $     0.71         $    0.83   $         0.71
                                                                        ================  ================  ===============

   Weighted average number of limited partner units outstanding               4,000,000         4,000,000        4,000,000
                                                                        ================  ================  ===============

</TABLE>
                See accompanying notes to financial statements.

<PAGE>


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

                         STATEMENTS OF PARTNERS' CAPITAL

                  Years Ended December 31, 2003, 2002 and 2001

<TABLE>
<CAPTION>

 <c>
                                           General Partners                                           Limited Partners
                                 --------------------------------------  -----------------------------------------------------------
                                                         Accumulated                                              Accumulated
                                   Contributions          Earnings         Contributions      Distributions         Earnings
                                 -------------------  -----------------  ------------------  -----------------  ------------------

Balance, December 31, 2000              $     1,000       $    190,934       $  40,000,000      $ (24,528,424)      $  21,721,508

    Distributions to limited
       partners ($0.85 per
       limited partner unit)                     --                 --                  --         (3,400,008)                 --
    Net income                                   --                 --                  --                 --           2,835,821
                                 -------------------  -----------------  ------------------  -----------------  ------------------

Balance, December 31, 2001                    1,000            190,934          40,000,000        (27,928,432)         24,557,329

    Distributions to limited
       partners ($0.85 per
       limited partner unit)                     --                 --                  --         (3,400,008)                 --
    Net income                                   --                 --                  --                 --           3,332,544
                                   -------------------  -----------------  ------------------  -----------------  -----------------

Balance, December 31, 2002                    1,000            190,934          40,000,000        (31,328,440)         27,889,873

    Distributions to limited
       partners ($0.85 per
       limited partner unit)                     --                 --                  --         (3,400,008)                 --
    Net income                                   --                 --                  --                 --           2,837,812
                                 -------------------  -----------------  ------------------  -----------------  ------------------

Balance, December 31, 2003              $     1,000        $   190,934       $  40,000,000      $ (34,728,448)      $  30,727,685
                                 ===================  =================  ==================  =================  ==================


</TABLE>
                See accompanying notes to financial statements.

<PAGE>

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

   $ (4,665,169)    $ 32,719,849



             --       (3,400,008)
             --        2,835,821
----------------  ---------------


     (4,665,169)      32,155,662



             --       (3,400,008)
             --        3,332,544
----------------  ---------------


     (4,665,169)      32,088,198



             --       (3,400,008)
             --        2,837,812
----------------  ---------------

   $ (4,665,169)    $ 31,526,002
================  ===============




<PAGE>

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

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

 <c>
                                                                           Year Ended December 31,
                                                             2003                  2002                 2001
                                                       -----------------     -----------------    -----------------


Cash Flows from Operating Activities:
       Net income                                         $   2,837,812         $   3,332,544        $   2,835,821
                                                       -----------------     -----------------    -----------------
       Adjustments to reconcile net income to net
          cash provided by operating activities:
              Depreciation                                      400,128               403,070              410,264
              Amortization                                          240                   984                1,808
              Equity in earnings of joint
                ventures, net of distributions                   54,508               106,643               (1,591 )
              Provision for write-down of assets                 57,915               105,193               56,506
              Gain on sale of assets                                 --              (330,476 )                 --
              Decrease (increase) in receivables                (21,295 )             (30,100 )            196,533
              Amortization of investment in
                direct financing leases                         144,892               127,811              109,275
              Increase in accrued rental income                (103,933 )            (142,676 )           (184,152 )
              Decrease (increase) in other assets                (1,346 )             (18,130 )             13,393
              Increase (decrease) in accounts
                payable, accrued expenses, and
                escrowed real estate taxes payable                9,577                   944              (27,056 )
              Increase (decrease) in due to
                related parties                                  (3,415 )               5,059             (117,137 )
              Increase in rents paid in advance
                and deposits and deferred rental
                income                                           25,826                54,029                9,168
                                                       -----------------     -----------------    -----------------
                   Total adjustments                            563,097               282,351              467,011
                                                       -----------------     -----------------    -----------------

Net cash provided by operating activities                     3,400,909             3,614,895            3,302,832
                                                       -----------------     -----------------    -----------------

Cash Flows from Investing Activities:
    Proceeds from sale of assets                                     --             2,144,163              947,000
    Additions to real estate properties                              --            (1,868,954 )                 --
    Investment in joint ventures                               (153,636 )                  --             (882,305 )
                                                       -----------------     -----------------    -----------------
        Net cash provided by (used in)
              investing activities                             (153,636 )             275,209               64,695
                                                       -----------------     -----------------    -----------------

Cash Flows from Financing Activities:
     Distributions to limited partners                       (3,400,008 )          (3,400,008 )         (3,400,008 )
                                                       -----------------     -----------------    -----------------
        Net cash used in financing activities                (3,400,008 )          (3,400,008 )         (3,400,008 )
                                                       -----------------     -----------------    -----------------

Net increase (decrease) in cash and cash
      equivalents                                              (152,735 )             490,096              (32,481 )

Cash and cash equivalents at beginning of year                1,275,846               785,750              818,231
                                                       -----------------     -----------------    -----------------

Cash and cash equivalents at end of year                  $   1,123,111      $      1,275,846         $    785,750
                                                       =================     =================    =================


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



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

                       STATEMENT OF CASH FLOWS - CONTINUED

<TABLE>
<CAPTION>

 <C>
                                                                                Year Ended December 31,

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

      Supplemental Schedule of Non-Cash
           Financing Activities:

      Distributions declared and unpaid at
           December 31                                          $    850,002         $    850,002          $   850,002
                                                            =================    =================    =================
</TABLE>
                See accompanying notes to financial statements.







<PAGE>



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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002 and 2001

1.       Significant Accounting Policies

         Organization  and Nature of Business - CNL Income Fund XIII,  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 and family-style restaurant chains.

         The general partners of the Partnership are CNL Realty Corporation (the
         "Corporate  General  Partner"),  James M.  Seneff,  Jr.  and  Robert A.
         Bourne.  Mr. Seneff and Mr. Bourne are also 50 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 real
         estate  property  acquisitions  at cost.  The  properties are leased to
         third parties  generally on a triple-net  basis,  whereby the tenant is
         responsible  for  all  operating  expenses  relating  to the  property,
         including property taxes,  insurance,  maintenance and repairs.  During
         the years ended December 31, 2003, 2002, and 2001, tenants paid, or are
         expected  to  pay,   directly  to  real   estate   taxing   authorities
         approximately  $521,800,  $523,100,  and  $501,300,   respectively,  in
         estimated  real  estate  taxes in  accordance  with the  terms of their
         leases.  The leases of the Partnership  provide for base minimum annual
         rental payments payable in monthly installments.  In addition,  certain
         leases  provide for  contingent  rental  revenues based on the tenants'
         gross sales in excess of a specified threshold.  The Partnership defers
         recognition  of  the  contingent  rental  revenues  until  the  defined
         thresholds  are met.  The leases  are  accounted  for using  either the
         operating or direct financing methods.

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

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

         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.


<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002 and 2001


1.       Significant Accounting Policies - Continued

         Substantially all leases are for 15 to 20 years and provide for minimum
         and contingent  rentals.  The lease options  generally allow tenants to
         renew the leases for two to 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.

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

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

         Investment  in  Joint  Ventures  - The  Partnership  accounts  for  its
         interests in Attalla  Joint  Venture and Salem Joint  Venture,  and the
         properties in Arvada,  Colorado;  Akron,  Ohio;  Miami,  Florida;  Blue
         Springs,   Missouri;  and  Tucker,   Georgia,  each  property  held  as
         tenants-in-common  with affiliates,  using the equity method since each
         joint  venture or tenancy in common  agreement  requires the consent of
         all  partners on all key  decisions  affecting  the  operations  of the
         underlying property.

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

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

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

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



<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


1.       Significant Accounting Policies - Continued

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

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

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

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

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


<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001

2.       Real Estate Properties with Operating Leases

         Real estate properties with operating leases consisted of the following
         at December 31:
<TABLE>
<CAPTION>

 <c>
                                                     2003                   2002
                                              --------------------   -------------------

           Land                                    $   12,668,461        $   12,668,461
           Buildings                                   11,718,056            11,718,056
                                              --------------------   -------------------
                                                       24,386,517            24,386,517
           Less accumulated depreciation               (3,737,944)           (3,337,816)
                                              --------------------   -------------------

                                                   $   20,648,573        $   21,048,701
                                              ====================   ===================
</TABLE>

         In June 2002, the Partnership  reinvested the majority of the net sales
         proceeds  from the sale of the property in Dayton,  Ohio, in a property
         in Houston,  Texas at an approximate cost of $918,000.  The Partnership
         acquired this property from CNL Funding 2001-A, LP, an affiliate of the
         general partners.

         In September 2002, the  Partnership  reinvested the majority of the net
         sales proceeds from the sale of the property in Overland Park,  Kansas,
         in a property  in Lee's  Summit,  Missouri  at an  approximate  cost of
         $951,000.  The  Partnership  acquired  this property from CNL Net Lease
         Investors, L.P., an affiliate of the general partners. The land portion
         of this  property  was  classified  as an  operating  lease  while  the
         building portion was classified as a direct financing lease.

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

                    2004                                  $  2,488,322
                    2005                                     2,494,971
                    2006                                     2,532,002
                    2007                                     2,544,709
                    2008                                     2,364,737
                    Thereafter                              10,997,310
                                                     ------------------

                             Total (1)                    $ 23,422,051
                                                     ==================

         (1) Excludes one lease that was terminated in 2004.

3.       Net Investment in Direct Financing Leases

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

 <c>
                                                              2003                       2002
                                                      ----------------------     ----------------------

                  Minimum lease payments receivable         $     8,179,060            $     8,908,514
                  Estimated residual values                       2,024,743                  2,024,743
                  Less unearned income                           (4,787,460)                (5,372,022)
                                                      ----------------------     ----------------------

                  Net investment in direct financing
                      leases                                $     5,416,343            $     5,561,235
                                                      ======================     ======================
</TABLE>



<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


3.       Net Investment in Direct Financing Leases - Continued

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

                      2004                          $   735,418
                      2005                              735,418
                      2006                              744,129
                      2007                              756,324
                      2008                              756,920
                      Thereafter                      4,450,850
                                               -----------------

                                                   $  8,179,059
                                               =================

4.       Investment in Joint Ventures

         The  Partnership  has a 50% and a 27.8%  interest  in the  profits  and
         losses of Attalla Joint Venture and Salem Joint Venture,  respectively.
         The remaining  interests in these joint ventures are held by affiliates
         of the Partnership which have the same general partners.

         The Partnership also owns properties in Arvada, Colorado;  Akron, Ohio;
         Miami, Florida; and Blue Springs,  Missouri,  each as tenants-in-common
         with affiliates of the general  partners.  As of December 31, 2003, the
         Partnership  owned  a  66.13%,   63.09%,   47.83%,  and  41%  interest,
         respectively, in the properties.

         In November  2003,  the  Partnership  and CNL Income Fund X, Ltd.,  CNL
         Income   Fund  XIV,   Ltd.,   and  CNL  Income   Fund  XV,   Ltd.,   as
         tenants-in-common,  invested in a property in Tucker,  Georgia. Each of
         the CNL Income  Funds is an  affiliate  of the  general  partners.  The
         Partnership  contributed  approximately  $153,600 for a 10% interest in
         the property.

         Attalla Joint Venture,  Salem Joint Venture,  and the  Partnership  and
         affiliates,  as  tenants-in-common  in five separate  tenancy-in-common
         arrangements, each own one property.



<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


4.       Investment in Joint Ventures - Continued

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

 <c>
                                                                                      December 31,
                                                                               2003                       2002
                                                                     --------------------       -------------------

        Real estate properties with operating leases, net                 $    7,259,858             $   5,853,726
        Net investment in direct financing lease                                 331,360                   339,093
        Cash                                                                      75,667                    42,733
        Receivables                                                                   --                     4,849
        Accrued rental income                                                    427,409                   403,428
        Other assets                                                                  --                       165
        Liabilities                                                               35,670                    22,001
        Partners' capital                                                      8,058,624                 6,621,993

                                                                                   Years ended December 31,
                                                                           2003             2002              2001
                                                                      ----------------   ------------   -----------------

        Revenues                                                       $   803,616         $ 773,934         $   760,782
        Expenses                                                          (134,319 )        (139,047 )          (129,936 )
                                                                      ----------------   ------------   -----------------
             Net income                                                $   669,297         $ 634,887         $   630,846
                                                                      ================   ============   =================
</TABLE>

         The Partnership  recognized  income totaling  $318,869,  $307,776,  and
         $309,381  for the  years  ended  December  31,  2003,  2002,  and  2001
         respectively,  from these joint  ventures  and the  properties  held as
         tenants-in-common with affiliates.

5.       Discontinued Operations

         During  2002,  the  partnership   identified  for  sale  and  sold  two
         properties  classified as discontinued  operations in the  accompanying
         financial statements.

         In April 2002, the  Partnership  recorded a provision for write-down of
         assets of  $105,193  in  anticipation  of the sale of the  Property  in
         Overland Park, Kansas. The provision represented the difference between
         the  Property's  net carrying  value and its estimated  fair value.  In
         August  2002,  the  Partnership  sold this  Property in Overland  Park,
         Kansas to a third party and received net sales  proceeds of  $1,094,300
         resulting  in  a  gain  on  disposal  of  discontinued   operations  of
         approximately $27,300.

         In June 2002, the Partnership sold its property in Dayton,  Ohio to the
         tenant and  received  net sales  proceeds of  approximately  $1,049,900
         resulting  in  a  gain  on  disposal  of  discontinued   operations  of
         approximately  $303,200. The financial results for these properties are
         reflected as  discontinued  operations  in the  accompanying  financial
         statements.


<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


5.       Discontinued Operations - Continued

         The operating results of discontinued operations are as follows:
<TABLE>
<CAPTION>

 <c>
                                                                            Year Ended December 31,
                                                                2003                2002               2001
                                                         -------------------- ------------------ -----------------

         Rental revenues                                          $       --       $    126,816      $    241,295
         Termination fee income                                           --            147,750                --
         Other income                                                     --             31,898                --
         Expenses                                                         --            (10,369 )         (28,371 )
         Provision for write-down of assets                               --           (105,193 )              --
                                                         -------------------- ------------------ -----------------

         Income from discontinued operations                      $       --       $    190,902      $    212,924
                                                         ==================== ================== =================
</TABLE>


6.       Allocations and Distributions

         From inception through December 31, 1999,  generally all net income and
         net losses of the Partnership, excluding gains and losses from the sale
         of  properties,  were  allocated  99% to the limited  partners  and one
         percent to the general  partners.  From inception  through December 31,
         1999,  distributions  of net cash  flow  were  made 99% to the  limited
         partners  and one percent to the  general  partners.  However,  the one
         percent of net cash flow to be distributed to the general  partners was
         subordinated  to receipt by the limited  partners of an aggregate,  ten
         percent,  cumulative,  noncompounded  annual  return on their  invested
         capital contributions (the "Limited Partners' 10% Return").

         From inception through December 31, 1999, generally, net sales proceeds
         from the sales of properties not in  liquidation of the  Partnership to
         the extent distributed,  were distributed first to the limited partners
         in an amount  sufficient to provide them with their  Limited  Partners'
         10% Return,  plus the return of their adjusted  capital  contributions.
         The  general   partners  then  received,   to  the  extent   previously
         subordinated   and  unpaid,   a  one  percent  interest  in  all  prior
         distributions   of  net  cash  flow  and  a  return  of  their  capital
         contributions. Any remaining sales proceeds were distributed 95% to the
         limited  partners  and five percent to the general  partners.  Any gain
         from a 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 from the sale of a property  was,  in general,
         allocated  first,  on a pro  rata  basis,  to  partners  with  positive
         balances in their capital accounts, and thereafter,  95% to the limited
         partners and five percent to the general partners.

         Generally, net sales proceeds from a sale of properties, in liquidation
         of the Partnership  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% to the
         limited partners and five percent to the general partners.


<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


6.       Allocations and Distributions - Continued

         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 years
         ended December 31, 2003, 2002, and 2001.

         During each of the years ended  December 31, 2003,  2002, and 2001, the
         Partnership   declared   distributions   to  the  limited  partners  of
         $3,400,008.  No distributions have been made to the general partners to
         date.

7.       Income Taxes

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

 <c>
                                                                          2003            2002            2001
                                                                     --------------- --------------- ---------------

         Net income for financial reporting purposes                    $ 2,837,812     $ 3,332,544     $ 2,835,821

         Effect of timing differences relating to depreciation              (50,081)        (51,854)        (54,090)

         Direct financing leases recorded as operating leases for
              tax reporting purposes                                        144,892         127,812         109,275

         Effect of timing differences relating to equity in
              earnings of joint ventures                                     12,242           1,691         (19,015)

         Effect of timing differences relating to gains/losses on
              real estate property sales                                         --         (68,684)         66,579

         Provision for write-down of assets                                  57,915              --          56,506

         Effect of timing differences relating to allowance for
              doubtful accounts                                              66,179           3,222          (5,674)

         Accrued rental income                                             (103,933)        (67,379)       (184,152)

         Rents paid in advance                                               27,479          66,510           9,168

         Other                                                                 (400)             --              --
                                                                     --------------- --------------- ---------------

         Net income for federal income tax purposes                     $ 2,992,105     $ 3,343,862     $ 2,814,418
                                                                     =============== =============== ===============
</TABLE>



<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


8.       Related Party Transactions

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

         The Advisor provides services  pursuant to a management  agreement with
         the partnership. In connection therewith, the Partnership agreed to pay
         certain  Advisor  management  fees of one  percent  of the sum of gross
         revenues  from  properties  wholly  owned  by the  Partnership  and the
         Partnership's  allocable  share of gross revenues from joint  ventures.
         Any  portion  of the  management  fee  not  paid  is  deferred  without
         interest. The Partnership incurred management fees of $37,560, $37,535,
         and $36,671,  for the years ended  December 31, 2003,  2002,  and 2001,
         respectively.

         The Advisor is also entitled to receive a deferred,  subordinated  real
         estate   disposition  fee,  payable  upon  the  sale  of  one  or  more
         properties,  based on the  lesser of  one-half  of a  competitive  real
         estate  commission  or three  percent of the sales price if the Advisor
         provides a substantial  amount of services in connection with the sale.
         However,  if the 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 the receipt by the limited  partners of their aggregate
         Limited Partners' 10% Return plus their invested capital contributions.
         No  deferred,  subordinated  real  estate  disposition  fees  have been
         incurred since inception.

         In June 2002, the Partnership acquired a property,  in Houston,  Texas,
         from CNL Funding 2001-A,  LP, for approximately  $918,000.  CNL Funding
         2001-A,  LP had purchased and temporarily held title to the property in
         order to facilitate the acquisition of the property by the Partnership.
         The  purchase  price  paid by the  Partnership  represented  the  costs
         incurred by CNL Funding 2001-A, LP to acquire and carry the property.

         In September 2002, the Partnership acquired a property in Lee's Summit,
         Missouri, from CNL Net Lease Investors,  L.P. ("NLI") at an approximate
         cost  of  $951,000.   During  2002,  and  prior  to  the  Partnership's
         acquisition of this property,  CNL Financial LP Holding, LP ("CFN") and
         CNL Net  Lease  Investors  GP Corp.  purchased  the  limited  partner's
         interest and general partner's interest, respectively, of NLI. Prior to
         this transaction,  an affiliate of the  Partnership's  general partners
         owned a 0.1%  interest  in NLI and served as a general  partner of NLI.
         The  original  general  partners of NLI waived  their rights to benefit
         from  this  transaction.  The  acquisition  price  paid  by CFN for the
         limited  partner's  interest  was  based on the  portfolio  acquisition
         price. The Partnership acquired the property in Lee's Summit,  Missouri
         at CFN's cost and did not pay any  additional  compensation  to CFN for
         the  acquisition of this  property.  Each CNL entity is an affiliate of
         the Partnership's general partners.

         During  the  years  ended  December  31,  2003,  2002,  and  2001,  the
         Partnership's   affiliates   provided   accounting  and  administrative
         services.  For the years ended  December 31, 2003,  2002, and 2001, the
         expenses  incurred for these  services  were  $157,816,  $199,488,  and
         $211,205, respectively.


<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001

8.       Related Party Transactions - Continued

         The amount due to related parties at December 31, 2003 and 2002 totaled
         $17,178 and $20,593, respectively.

9.       Concentration of Credit Risk

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

 <c>
                                             2003                2002               2001
                                         -------------     ---------------    ----------------

         Golden Corral Corp.               $  698,511          $  676,458     $       616,239
         Flagstar Enterprises, Inc.           630,053             635,823             640,524
         Long John Silver's, Inc.             408,051             403,960             414,556
</TABLE>

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

 <c>
                                                                   2003                2002               2001
                                                              ---------------     ---------------    ----------------


         Golden Corral Buffet and Grill                           $  698,511          $  676,458          $  616,239
         Hardee's                                                    630,053             635,823             640,524
         Long John Silver's                                          408,051             403,960             414,556
         Burger King                                                     N/A             403,580             412,489
</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 revenues.

         Although  the  Partnership's   properties  are  geographically  diverse
         throughout the United States of America, and the Partnership's  lessees
         operate a variety  of  restaurant  concepts,  default  by any lessee or
         restaurant   chain   contributing   more  than  ten   percent   of  the
         Partnership's   revenues  will  significantly  impact  the  results  of
         operations  of the  Partnership  if the  Partnership  is  not  able  to
         re-lease the properties in a timely manner.




<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


10.      Selected Quarterly Financial Data

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

 <c>
                 2003 Quarter               First          Second          Third            Fourth          Year
         -----------------------------    -----------    ------------    -----------      -----------    ------------

         Continuing operations
             Revenues                       $ 813,406        $830,584       $804,960         $896,769      $3,345,719
             Equity in earnings of
               unconsolidated
               joint ventures                  77,242          79,303         81,064           81,260         318,869
             Income from
               continuing
               operations                     644,926         735,091        710,606          747,189       2,837,812

         Discontinued operations
             Revenues                              --              --             --               --              --
             Income from
               discontinued
               operations                          --              --             --               --              --

         Net income                           644,926         735,091        710,606          747,189       2,837,812

         Income per limited partner unit:
         Continuing operations                 $ 0.16         $  0.18        $  0.18           $ 0.19         $  0.71
         Discontinued operations                   --              --             --               --              --
                                          -----------    ------------    -----------      -----------    ------------
                                               $ 0.16         $  0.18        $  0.18           $ 0.19         $  0.71
                                          ===========    ============    ===========      ===========    ============

</TABLE>






<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


10.      Selected Quarterly Financial Data - Continued

<TABLE>
<CAPTION>

 <c>
                  2002 Quarter                 First          Second          Third          Fourth           Year
        ---------------------------------    ----------     ------------    -----------    -----------     ------------

        Continuing operations
            Revenues                           $786,877         $788,839       $831,438       $876,642       $3,283,796
            Equity in earnings of
              unconsolidated joint
              ventures                           75,664           75,829         76,297         79,986          307,776
            Income from continuing
              operations                        636,981          673,768        728,972        771,445        2,811,166

        Discontinued operations
            Revenues                             89,603           54,084        162,777             --          306,464
            Income (loss) from and
              gain on disposal of
              discontinued operations           (23,158 )        355,117        189,419             --          521,378

        Net income                              613,823        1,028,885        918,391        771,445        3,332,544

        Income per limited partner unit:
            Continuing operations                $ 0.16          $  0.17        $  0.18        $  0.19          $  0.70
            Discontinued operations               (0.01 )           0.09           0.05             --             0.13
                                             ----------     ------------    -----------    -----------     ------------
                                                 $ 0.15          $  0.26        $  0.23        $  0.19          $  0.83
                                             ==========     ============    ===========    ===========     ============
</TABLE>

11.     Subsequent Event

         In March 2004, the tenant of the Property in Houston,  Texas terminated
         its lease, in accordance with its lease  agreement,  when more than 50%
         of the land was taken by a partial  right-of-way  taking.  As a result,
         the  Partnership  recorded  a  provision  for  write-down  of assets of
         approximately $57,900 at December 31, 2003.





<PAGE>


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

         None.


Item 9A. Controls and Procedures


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

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


                                    PART III


Item 10.  Directors and Executive Officers of the Registrant

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

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

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

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

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

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

Section 16(a) Beneficial Ownership Reporting Compliance

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

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

Code of Business Conduct

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

Audit Committee Financial Expert

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

Item 11. Executive Compensation

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

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

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

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

 <c>
                    Title of Class                           Name of Partner                 Percent of Class

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

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

         The Partnership does not have any equity compensation plans.



<PAGE>



Item 13. Certain Relationships and Related Transactions

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

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

Reimbursement  to affiliates for       Operating  expenses are reimbursed at       Accounting and
operating expenses                     the  lower  of  cost  or  90%  of the       administrative services:
                                       prevailing  rate at which  comparable       $157,816
                                       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       $37,560
affiliates                             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 and the
                                       property owned with an affiliate as
                                       tenants-in-common. 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 affiliates of the
                                       General Partners. 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, 2003
---------------------------------      --------------------------------------      ------------------------------

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

General   Partners'    deferred,       A deferred,  subordinated share equal       $-0-
subordinated       share      of       to   one   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.



<PAGE>



                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
         And Recipient                         Method of Computation                  Ended December 31, 2003
---------------------------------      --------------------------------------      ------------------------------

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>


Item 14.  Principal Accountant Fees and Services

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

<TABLE>
<CAPTION>

 <c>
                                                    2003                                      2002
                                            ---------------------                     ---------------------

Audit Fees (1)                                     $      14,141                             $      12,500
Tax Fees (2)                                               7,130                                     6,905
                                            ---------------------                     ---------------------
     Total                                         $      21,271                             $      19,405
                                            =====================                     =====================
</TABLE>


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

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

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



<PAGE>


                                     PART IV


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

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

     1.   Financial Statements

             Report of Independent Certified Public Accountants

             Balance Sheets at December 31, 2003 and 2002

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

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

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

             Notes to Financial Statements

     2.   Financial Statement Schedules

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

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

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

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

     3.    Exhibits

             3.1    Affidavit  and  Certificate  of Limited  Partnership  of CNL
                    Income  Fund  XIII,   Ltd.   (Included  as  Exhibit  3.2  to
                    Registration  Statement  No.  33-53672-01  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  3.2  to
                    Registration  Statement  No.  33-53672-01  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, 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  10.3 to Form 10-K  filed  with the  Securities  and
                    Exchange  Commission  on April  1,  1996,  and  incorporated
                    herein by reference.)

             10.4   Assignment of Management  Agreement  from CNL Fund Advisors,
                    Inc. to CNL APF Partners,  LP.  (Included as Exhibit 10.4 to
                    Form 10-Q filed with the Securities and Exchange  Commission
                    on August 14, 2001, and incorporated herein by reference.)

             10.5   Assignment of Management Agreement from CNL APF Partners, LP
                    to CNL Restaurants  XVIII, Inc. (Included as Exhibit 10.5 to
                    Form 10-Q filed with the Securities and Exchange  Commission
                    on August 14, 2002, and incorporated herein by reference.)

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

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

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

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

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



<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 24th day of
March, 2004.


                                         CNL INCOME FUND XIII, 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>

 <c>
                     Signature                                 Title                                   Date



      /s/ Robert A. Bourne                     President,   Treasurer   and  Director             March 24, 2004
      ------------------------------------     (Principal Financial and Accounting
      Robert A. Bourne                         (Officer




      /s/ James M. Seneff, Jr.                 Chief  Executive  Officer and Director             March 24, 2004
      ------------------------------------     (Principal Executive Officer)
      James M. Seneff, Jr.

</TABLE>







<PAGE>


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

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                  Years Ended December 31, 2003, 2002, and 2001

<TABLE>
<CAPTION>

 <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
----------    -----------------     ------------  ---------------     -------------    -------------     ------------  ------------

  2001        Allowance for
                  doubtful
                  accounts     (a)     $  5,674         $     --         $   2,428 (b)    $   5,674 (c)     $  2,428        $   --
                                    ============  ===============     =============    =============     ============  ============

  2002        Allowance for
                  doubtful
                  accounts     (a)       $   --       $    1,705         $   1,671 (b)      $    --          $   154      $  3,222
                                    ============  ===============     =============    =============     ============  ============

  2003        Allowance for
                  doubtful
                  accounts     (a)     $  3,222         $     95         $  80,618 (b)      $    --         $ 14,534      $ 69,401
                                     ============  ===============     =============    =============     ============  ============
</TABLE>

(a) Deducted from receivables on the balance sheet.

(b) Reduction of rental and other income.

(c) Amounts written off as uncollectible.






<PAGE>



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

             SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 2003

<TABLE>
<CAPTION>

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

Properties the Partnership
  has Invested in Under
  Operating Leases:

    Arby's Restaurant:
      Philadelphia, Pennsyl-ania (i)   $274,580           -          -       -    $274,580          (f)   $274,580
      Lee's Summit, Missour- (k)        445,638           -          -       -     445,638          (f)    445,638

    Burger King Restaurants:
      Cincinnati, Ohio     -            256,901     669,537          -       -     256,901     669,537     926,438
      Lafayette, Indiana   -            247,183     723,304          -       -     247,183     723,304     970,487
      Pineville, Louisiana -            174,843     618,815          -       -     174,843     618,815     793,658

    Checkers Drive-In Restaurants:
      Houston, Texas       -            445,389           -          -       -     445,389           -     445,389
      Port Richey, Florida -            380,055           -          -       -     380,055           -     380,055
      Pensacola, Florida   -            280,409           -          -       -     280,409           -     280,409
      Orlando, Florida     -            424,323           -          -       -     424,323           -     424,323
      Boca Raton, Florida  -            501,416           -          -       -     501,416           -     501,416
      Venice, Florida      -            374,675           -          -       -     374,675           -     374,675
      Woodstock, Georgia   -            386,638           -          -       -     386,638           -     386,638
      Lakeland, Florida    -            326,175           -          -       -     326,175           -     326,175

    Denny's Restaurants:
      Peoria, Arizona (h)  -            460,107           -    552,207       -     460,107     552,207   1,012,314
      Mesa, Arizona        -            530,494           -    540,983       -     530,494     540,983   1,071,477

    Golden Corral
      Buffet and Grill
      Dallas, Texas        -            611,589   1,071,838          -       -     611,589   1,071,838   1,683,427
      San Antonio, Texas   -            625,527     964,122          -       -     625,527     964,122   1,589,649
      Panama City, Florida -            617,016           -   1,103,437      -     617,016   1,103,437   1,720,453

    Hardee's  Restaurants:
      Ashland, Alabama     -            197,336     417,418          -       -     197,336     417,418     614,754
      Bloomingdale, Tenness-e           160,149     424,977          -       -     160,149     424,977     585,126
      Blytheville, Arkansas-            164,004           -          -       -     164,004          (f)    164,004
      Chapin, South Carolin-            218,639     460,364          -       -     218,639     460,364     679,003
      Kingsport, Tennessee -            204,516           -          -       -     204,516          (f)    204,516
      Opelika, Alabama     -            240,363     412,621          -       -     240,363     412,621     652,984
      Spartanburg, South Ca-olina       226,815     431,574          -       -     226,815     431,574     658,389

    Jack in the Box Restaurants:
      Sacramento, Californi-            323,929     601,054          -       -     323,929     601,054     924,983
      Houston, Texas       -            315,842     590,708          -       -     315,842     590,708     906,550
      Arlington, Texas     -            404,752     592,173          -       -     404,752     592,173     996,925

    Long John Silver's Restaurants:
      Penn Hills, Pennsylva-ia (j)      292,370     356,444          -       -     292,370     356,444     648,814
      Arlington, Texas     -            362,939           -          -       -     362,939          (f)    362,939
      Johnstown, Pennsylvan-a           254,412           -          -       -     254,412          (f)    254,412
      Orlando, Florida     -            299,696     139,676          -       -     299,696     139,676     439,372
      Austin, Texas        -            463,937           -          -       -     463,937          (f)    463,937

    Steak -n- Shake Restaurant:
      Tampa, Florida       -            372,748           -          -       -     372,748          (f)    372,748

    Taco Cabana Restaurant:
      Houston, Texas (l)   -            512,861     405,095          -       -     512,861     405,095     917,956

    Wendy's Old Fashioned Hamburger
      Restaurant:
      Salisbury, Maryland  -            290,195     641,709          -       -     290,195     641,709     931,904
                                      ----------  ----------  ---------  ------  ----------  ----------  ----------

                                      $12,668,461 $9,521,429  $2,196,627   -   $12,668,461 $11,718,056 $24,386,517
                                      ==========  ==========  =========  ======  ==========  ==========  ==========

Properties the Partnership has
   Invested in Under Direct
   Financing Leases

    Arby's Restaurant
      Philadelphia, Pennsyl-ania              -    $515,075          -       -           -          (f)         (f)
      Lee Summit, Missouri -                  -     505,360          -       -           -          (f)         (f)

    Hardee's Restaurants
      Blytheville, Arkansas-                  -     450,014          -       -           -          (f)         (f)
      Huntingdon, Tennessee-            100,836     427,932          -       -          (f)         (f)         (f)
      Kingsport, Tennessee -                  -     484,785          -       -           -          (f)         (f)
      Parsons, Tennessee   -            101,332     409,671          -       -          (f)         (f)         (f)
      Trenton, Tennessee   -            147,232     442,640          -       -          (f)         (f)         (f)

    Jack in the Box Restaurant:
      Cleburne, Texas      -            145,890     496,797          -       -          (f)         (f)         (f)
    Long John Silver's Restaurants:
      Arlington, Texas     -                  -     449,369          -       -           -          (f)         (f)
      Johnstown, Pennsylvan-a                 -           -    427,552       -           -          (f)         (f)
      Austin, Texas        -                  -     517,109          -       -           -          (f)         (f)

    Steak-n-Shake Restaurant:
      Tampa, Florida       -                  -           -    537,404       -           -          (f)         (f)
                                      ----------  ----------  ---------  ------  ----------


                                       $495,290   $4,698,752  $964,956       -           -
                                      ==========  ==========  =========  ======  ==========

</TABLE>

<page>

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






         -   1993   07/93        (d)
         -   1996   09/02        (d)


   232,658   1988   07/93        (b)
   251,338   1989   07/93        (b)
   215,032   1990   07/93        (b)


        (g)    -    03/94        (g)
        (g)    -    03/94        (g)
        (g)    -    03/94        (g)
        (g)    -    03/94        (g)
        (g)    -    03/94        (g)
        (g)    -    03/94        (g)
        (g)    -    10/94        (g)
        (g)    -    04/95        (g)


    72,652   1994   10/93        (h)
   173,834   1994   12/93        (b)



   379,593   1991   05/93        (b)
   340,215   1993   06/93        (b)
   360,329   1994   11/93        (b)


   145,042   1992   07/93        (b)
   147,669   1992   07/93        (b)
         -   1991   07/93        (d)
   159,974   1993   07/93        (b)
         -   1992   07/93        (d)
   143,379   1992   07/93        (b)
   149,969   1993   07/93        (b)


   210,511   1992   06/93        (b)
   205,320   1993   07/93        (b)
   205,774   1993   08/93        (b)


    63,334   1993   07/93        (j)
         -   1993   08/93        (d)
         -   1993   08/93        (d)
    47,222   1983   11/93        (b)
         -   1993   12/93        (d)


         -   1994   12/93        (d)


    21,377   1994   06/02        (b)



   212,722   1993   01/94        (b)
 ----------

$3,737,944
 ==========






        (d)  1993   07/93        (d)
        (d)  1996   09/02        (d)


        (d)  1991   07/93        (d)
        (e)  1992   07/93        (e)
        (d)  1992   07/93        (d)
        (e)  1992   07/93        (e)
        (e)  1992   07/93        (e)


        (e)  1988   11/93        (e)

        (d)  1993   08/93        (d)
        (d)  1993   08/93        (d)
        (d)  1993   12/93        (d)


        (d)  1994   12/93        (d)













<PAGE>
                           CNL INCOME FUND XIII, LTD.
                         (A Florida Limited Partnership)

         NOTES TO SCHEDUE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 2003

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

 <c>
                                                                                                   Accumulated
                                                                                 Cost              Depreciation
                                                                           ------------------   -------------------

         Properties the Partnership has invested in Under Operating
              Leases:

             Balance, December 31, 2000                                        $  22,470,716         $   2,558,777
             Reclassified from net investment in direct financing lease              552,207                    --
             Depreciation expense                                                         --               384,543
                                                                           ------------------   -------------------

             Balance, December 31, 2001                                           23,022,923             2,943,320
             Acquisition                                                           1,363,594                    --
             Depreciation expense                                                         --               394,496
                                                                           ------------------   -------------------

             Balance, December 31, 2002                                           24,386,517             3,337,816
             Depreciation expense                                                         --               400,128
                                                                           ------------------   -------------------

             Balance, December 31, 2003                                        $  24,386,517         $   3,737,944
                                                                           ==================   ===================
</TABLE>


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

(c)      As of December 31, 2003, the aggregate cost of the Partnership's wholly
         owned  Properties was $31,225,186 for federal income tax purposes.  All
         of the leases are treated as  operating  leases for federal  income tax
         purposes.

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

(e)      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
         the net investment in direct financing leases; therefore,  depreciation
         is not applicable.

(f)      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.

(g)      The  building  portion  of  this  Property  is  owned  by  the  tenant;
         therefore, depreciation is not applicable.

(h)      Effective  February  2001,  the lease  for this  Property  was  amended
         resulting in the  reclassification of the building portion of the lease
         as an operating  lease. The building was recorded at net book value and
         depreciated  over its  remaining  estimated  life of  approximately  22
         years.

(i)      Effective  May  1999,  the  Partnership  entered  into a new  lease and
         converted   the   building  to  a  new   concept,   resulting   in  the
         reclassification  of the  building  portion  of the  lease  as a direct
         financing lease.

(j)      Effective  October  1999,  the  lease  for this  Property  was  amended
         resulting in the  reclassification of the building portion of the lease
         as an operating  lease. The building was recorded at net book value and
         depreciated  over its  remaining  estimated  life of  approximately  24
         years.


<PAGE>


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

         NOTES TO SCHEDUE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 2003


(k)      During the year ended December 31, 2002, the Partnership purchased real
         estate from CNL Net Lease  Investors,  L.P. an affiliate of the General
         Partners,  for an aggregate cost of $950,998.  The portion of the lease
         relating to the building has been recorded as a direct financing lease.

(l)      During the year ended December 31, 2002, the Partnership purchased land
         and building from CNL Funding  2001-A,  LP, an affiliate of the General
         Partners, for an aggregate cost of $917,956.










<PAGE>



                                  EXHIBIT INDEX

Exhibit Number


(a)  Exhibits

       3.1     Affidavit and  Certificate  of Limited  Partnership of CNL Income
               Fund  XIII,  Ltd.   (Included  as  Exhibit  3.2  to  Registration
               Statement No. 33-53672-01 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  3.2  to  Registration
               Statement No. 33-53672-01 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, 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 10.3 to Form
               10-K filed with the Securities  and Exchange  Commission on April
               1, 1996, and incorporated herein by reference.)

       10.4    Assignment of Management  Agreement from CNL Fund Advisors,  Inc.
               to CNL APF Partners,  LP.  (Included as Exhibit 10.4 to Form 10-Q
               filed with the Securities  and Exchange  Commission on August 13,
               2001, and incorporated herein by reference.)

       10.5    Assignment of Management  Agreement from CNL APF Partners,  LP to
               CNL  Restaurants  XVIII,  Inc.  (Included as Exhibit 10.5 to Form
               10-Q filed with the Securities and Exchange  Commission on August
               14, 2002, and incorporated herein by reference.)

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

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

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

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


<PAGE>




                                  EXHIBIT 31.1

<PAGE>


                                  EXHIBIT 31.2

<PAGE>


                                  EXHIBIT 32.1


<PAGE>

                                  EXHIBIT 32.2