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, 2002

                                       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, 1999, 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. As of December 31, 2002,
the Partnership owned 46 Properties.  The 46 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 four 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  tax  considerations.  Certain
lessees also have been granted options to purchase Properties,  generally at the
Property's  then fair market  value after a specified  portion of the lease term
has elapsed.  The  Partnership has no obligation to sell all or any portion of a
Property  at any  particular  time,  except as may be  required  under  property
purchase options granted to certain lessees.

Leases

         Although there are variations in the specific terms of the leases,  the
following  is  a  summarized   description  of  the  general  structure  of  the
Partnership's  leases. The leases of the Properties 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 10 to 20 years (the  average  being 19  years),  and expire
between 2003 and 2021. 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 46 Properties also have been
granted options to purchase  Properties at the Property's then fair market value
after a specified portion of the lease term has elapsed.  Fair market value will
be determined  through an appraisal by an independent  appraisal firm. Under the
terms of certain leases,  the option purchase price may equal the  Partnership's
original cost to purchase the Property  (including  acquisition  costs),  plus a
specified percentage from the date of the lease or a specified percentage of the
Partnership's purchase price, if that amount is greater than the Property's fair
market value at the time the purchase option is exercised.

         The leases 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  2002,  the  Partnership  reinvested  the net sales  proceeds it
received from the sales of the  Properties  in  Properties  in Dayton,  Ohio and
Overland Park,  Kansas,  in two Properties  located in Houston,  Texas and Lee's
Summit,  Missouri.  The lease terms for these Properties are  substantially  the
same as the Partnership's other leases.

         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. As of March 10, 2003, the Partnership has
continued receiving rental payments relating to this lease. While the tenant has
neither rejected nor affirmed the lease,  there can be no assurance that it will
not be rejected in the future. The lost revenues that would result if the tenant
rejects this lease will have an adverse  effect on the results of  operations of
the  Partnership if the  Partnership is unable to lease the Property in a timely
manner.

Major Tenants

         During 2002,  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 Partnership's  total rental revenues (including the
Partnership's  share of 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, 2002, 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
the  Partnership's  total rental revenues in 2003. In addition,  four Restaurant
Chains,   Long  John  Silver's,   Hardee's,   Golden  Corral  Family  Steakhouse
Restaurants ("Golden Corral"), and Burger King, each accounted for more than ten
percent of the  Partnership's  total rental  revenues during 2002 (including the
Partnership's  share of 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 four Restaurant
chains  each  will  continue  to  account  for  more  than  ten  percent  of the
Partnership's  total rental  revenues under the terms of the leases in 2003. Any
failure of these  lessees  or  Restaurant  Chains  could  materially  affect the
Partnership's  income if the  Partnership is not able to re-lease the Properties
in a timely  manner.  No single  tenant  or group of  affiliated  tenants  lease
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, 2002:
<TABLE>
<CAPTION>

         Entity Name             Year      Ownership               Partners                   Property

 <c>
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,                          CNL Income 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               Blue Spring, MS
     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
business entity. 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 business entity.

         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.

         The joint  venture  and  tenancy  in common  agreements  restrict  each
party's  ability to sell,  transfer  or assign  its joint  venture or tenancy in
common 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. (formerly known as CNL Restaurants XVIII, Inc.),
an affiliate of the General  Partners,  provides  certain  services  relating to
management  of the  Partnership  and its  Properties  pursuant  to a  management
agreement with the Partnership. CNL APF Partners, LP assigned its rights in, and
its  obligations  under,  the management  agreement with the  Partnership to RAI
Restaurants,  Inc.  ("Advisor")  effective January 1, 2002. All of the terms and
conditions of the management agreement,  including the payment of fees, remained
unchanged.  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 had agreed to pay the Advisor an
annual fee of one percent of the sum of gross rental  revenues  from  Properties
wholly owned by the Partnership plus the Partnership's  allocable share of gross
revenues of joint ventures in which the Partnership is a co-venturer, but not in
excess of competitive fees for comparable services.

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

Competition

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


Item 2.  Properties

         As of December 31, 2002, the Partnership owned 46 Properties. Of the 46
Properties, 40 are owned by the Partnership in fee simple, two are owned through
joint  venture  arrangements  and four  are  owned  through  tenancy  in  common
arrangements.  See Item 1.  Business  - Joint  Venture  and  Tenancy  in  Common
Arrangements.  The Partnership is not permitted to encumber its Properties under
the terms of its  partnership  agreement.  Reference  is made to the Schedule of
Real Estate and  Accumulated  Depreciation  for a listing of the  Properties and
their  respective  costs,  including  acquisition  fees and certain  acquisition
expenses.

Description of Properties

         Land.  The  Partnership's  Property  sites,  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, 2002 by state.  More detailed
information  regarding  the  location  of the  Properties  is  contained  in the
Schedule of Real Estate and Accumulated Depreciation.

                 State                                 Number of Properties

                 Alabama                                           3
                 Arizona                                           2
                 Arkansas                                          1
                 California                                        1
                 Colorado                                          1
                 Florida                                          10
                 Georgia                                           1
                 Indiana                                           1
                 Louisiana                                         1
                 Maryland                                          1
                 Missouri                                          2
                 Ohio                                              3
                 Pennsylvania                                      3
                 South Carolina                                    2
                 Tennessee                                         5
                 Texas                                             9
                                                               ------
                 TOTAL PROPERTIES                                 46
                                                               ======

         Buildings.  Each of the  Properties  owned by the  Partnership,  either
directly or indirectly,  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
building  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, 2002, 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, 2002, 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 $6,852,267, respectively.


         The  following  table lists the  Properties  owned by the  Partnership,
either directly or indirectly, as of December 31, 2002 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
                Steak-N-Shake                                      1
                Taco Cabana                                        1
                Wendy's                                            1
                                                                -----
                TOTAL PROPERTIES                                  46
                                                                =====

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

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

         Leases.  The Partnership leases the Properties to operators of selected
national and regional fast-food 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.

         At December 31, 2002,  2001,  2000, and 1999, the Properties were fully
occupied. At December 31, 1998, the Properties were 98% occupied.  The following
is a schedule of the average rent per Property for the years ended December 31:
<TABLE>
<CAPTION>

                                      2002              2001             2000              1999              1998
                                  --------------    -------------    --------------    -------------     -------------

 <c>
Rental Revenues (1)(2)              $ 3,656,162     $ 3,768,826        $3,753,973       $3,727,854        $3,482,136
Properties (2)                               46              46                46               46                47
Average Rent Per Property                79,482      $   81,931          $ 81,608         $ 81,040          $ 74,088
</TABLE>

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

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

         The following is a schedule of lease expirations for leases in place as
of December 31, 2002 for the next ten years and thereafter.
<TABLE>
<CAPTION>

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

 <c>
        2003                         1                $   34,266                      0.94%
        2004                        --                        --                         --
        2005                        --                        --                         --
        2006                        --                        --                         --
        2007                         1                    34,800                      0.96%
        2008                         2                   347,428                      9.56%
        2009                         2                   247,790                      6.82%
        2010                         2                   130,126                      3.58%
        2011                         3                   264,139                      7.27%
        2012                         1                    85,663                      2.36%
        Thereafter                  34                 2,490,825                     68.51%
                                   ---------          ----------------          -----------------

        Total                       46              $  3,635,037                    100.00%
                                   =========          ================          =================
</TABLE>

         Leases  with  Major   Tenants.   The  terms  of  the  leases  with  the
Partnership's  major  tenants as of December  31,  2002 (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 or any affiliate of
the General Partners,  nor any of their respective  Properties,  is party to, or
subject to, any material pending legal proceedings.


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

        Not applicable.


                                     PART II


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

(a)      As of March 10, 2003,  there were 3,027 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 2002,  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, 2002,  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 2002 and 2001 other than
pursuant to the Plan.
<TABLE>
<CAPTION>

                                                2002(1)                                    2001(1)
                                 ---------------------------------------    ---------------------------------------
                                    High           Low          Average        High           Low          Average
                                 ----------    ----------     ----------    ----------    ----------     ----------

 <c>
    First Quarter                   $ 9.50        $ 6.00         $ 7.95        $ 7.08        $ 6.04         $ 6.65
    Second Quarter                    7.09          7.05           7.07          7.01          6.57           6.76
    Third Quarter                     9.50          6.00           8.86          7.01          7.01           7.01
    Fourth Quarter                    6.00          6.00           6.00          7.45          6.39           6.97
</TABLE>

(1)      A total of 59,780 and 18,355 Units were transferred other than pursuant
         to  the  Plan  for  the  years  ended   December  31,  2002  and  2001,
         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, 2002 and 2001, 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 2002 and 2001 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, 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. No distributions have been made to the General Partners to date.

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

(b)      Not applicable.

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

                                           2002             2001              2000             1999              1998
                                       -------------    --------------    -------------    --------------    -------------

 <c>
Year ended December 31:
  Continuing Operations (2):
      Revenues                           $ 3,283,796       $3,187,169       $3,329,371        $3,230,159       $3,369,068
      Equity in earnings of
        joint ventures                       307,776          309,381          244,344           242,158          243,492
      Income from continuing
        operations                         2,811,166        2,622,897        2,872,443         2,461,171        2,482,482

  Discontinued Operations (3):
      Revenues                               306,464          241,295          244,380           247,417          177,055
      Income from discontinued
        operations (3)                       521,378          212,924          216,854           219,994           13,373

   Net income                              3,332,544        2,835,821        3,089,297         2,681,165        2,495,855

   Net income per unit:
   Continuing operations (1)               $    0.70         $   0.66         $   0.72          $   0.62         $   0.62
   Discontinued operations (2)                  0.13             0.05             0.05              0.05               --
                                       -------------    --------------    -------------    --------------    -------------
        Total                              $    0.83         $   0.71         $   0.77          $   0.67         $   0.62
                                       =============    ==============    =============    ==============    =============

   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                          $33,142,001      $33,149,433      $33,848,645       $34,337,261      $34,687,493
   Total partners' capital                32,088,198       32,155,662       32,719,849        33,030,560       33,749,403
</TABLE>

(1)      Income from  continuing  operations  for the years ended  December  31,
         2001,  2000 and 1998 include  provisions  for  write-down  of assets of
         $56,506,  $51,618 and $605,290,  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)      Certain  items in the  prior  year's  financial  statements  have  been
         reclassified to conform to 2002 presentation.  These  reclassifications
         had no effect on total net income.  The results of operations  relating
         to properties  that were either  disposed of or were classified as held
         for  sale  as  of  December  31,  2002  are  reported  as  discontinued
         operations.  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.

(3)      Income from  discontinued  operations  for the year ended  December 31,
         2002 includes  provisions  for  write-down  of assets of $105,193,  and
         gains on sale of assets of $330,476.

         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  selected   national  and  regional   fast-food  and  family-style
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, 2000, the Partnership  owned 41 Properties  directly
and five  Properties  indirectly  through  joint  venture  or  tenancy in common
arrangements.  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.

Capital Resources

         For the  years  ended  December  31,  2002,  2001 and  2000,  cash from
operating  activities was $3,614,895,  $3,302,832 and $3,360,034,  respectively.
The increase in cash from operating activities during 2002, as compared to 2001,
and the decrease in cash from operating  activities  during 2001, as compared to
2000, resulted from changes in the Partnership's  working capital and changes in
income and expenses.

         Other sources and uses of cash included the following  during the years
ended December 31, 2002, 2001, and 2000.

         In May 1999, the Partnership  entered into a new lease for the Property
in Philadelphia,  Pennsylvania with the new tenant to operate the Property as an
Arby's restaurant.  In connection  therewith,  the Partnership funded a total of
approximately  $325,900 in renovation costs, of which approximately  $87,600 was
incurred during the year ended December 31, 2000. The Partnership used a portion
of the net sales proceeds from the 1999 sale of the Property in Houston,  Texas,
to pay such costs.

         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 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.  As of December 31, 2002, the Partnership  owned 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 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  addition,  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
addition,  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.  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.  The General Partners believe that this transaction,  or a portion
thereof,  relating  to  the  sale  of the  Property  in  Dayton,  Ohio  and  the
reinvestment  of the net sales  proceeds,  described  above,  will  qualify as a
like-kind transaction for federal income tax purpose.

         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. As of March 15, 2003, the Partnership has
continued receiving rental payments relating to this lease. While the tenant has
neither rejected nor affirmed the lease,  there can be no assurance that it will
not be rejected in the future. The lost revenues that would result if the tenant
rejects this lease will have an adverse  effect on the results of  operations of
the  Partnership if the  Partnership is unable to lease the Property in a timely
manner.

         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.

         Currently, rental income from the Partnership's Properties are invested
in  short-term  highly liquid  investments  such as demand  deposit  accounts at
commercial  banks,  money market accounts and  certificates of deposit with less
than a  90-day  maturity  date,  pending  use of  such  funds  to  invest  in an
additional Property,  and to pay Partnership  expenses, or to make distributions
to partners.  At December 31, 2002, the Partnership  had $1,275,846  invested in
such  short-term  investments  as compared to $785,750 at December 31, 2001. The
increase in cash and cash  equivalents  at  December  31,  2002,  as compared to
December 31, 2001, was primarily due to approximately  $275,000 in remaining net
sales proceeds pending  reinvestment in an additional  Property.  As of December
31, 2002,  the average  interest  rate earned by the  Partnership  on the rental
income   deposited  in  demand   deposit   accounts  at  commercial   banks  was
approximately  1.31% annually.  The funds remaining at December 31, 2002,  after
payment of  distributions  and other  liabilities,  will be used 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 years ended  December  31, 2001 and
2000,  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, 2002,  2001 and 2000. This  represents  distributions  of $0.85 per
Unit  for  each of the  years  ended  December  31,  2002,  2001  and  2000.  No
distributions  were made to the General partners during the years ended December
31, 2002, 2001 and 2000. No amounts  distributed to the Limited Partners for the
years ended  December 31, 2002,  2001 and 2000,  are required to be or have been
treated by the  Partnership  as a return of capital for purposes of  calculating
the  Limited  Partners'  return on their  adjusted  capital  contributions.  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, 2002, 2001 and 2000.

         As of December  31, 2002 and 2001,  the  Partnership  owed  $20,593 and
$15,534,  respectively,  to affiliates  for operating  expenses,  accounting and
administrative  services,  and  management  fees.  As of  March  15,  2003,  the
Partnership had reimbursed the affiliates for these amounts.  Other liabilities,
including  distributions payable,  increased to $1,033,210 at December 31, 2002,
from  $978,237 at December  31,  2001,  primarily  as a result of an increase in
rents paid in advance.  The General  Partners  believe that the  Partnership has
sufficient cash on hand to meet its current working capital needs.

Long-Term Liquidity

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

Critical Accounting Policies

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

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

         Management  reviews 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.

         When the Partnership makes the decision to sell or commits to a plan to
sell a Property, its operating results are reported as discontinued operations.

Results of Operations

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

         Total rental  revenues 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  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 Dayton, Ohio, and Overland Park, Kansas in two Properties
in Houston,  Texas and Lee's Summit,  Missouri.  The increase in rental revenues
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 also
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.,
a Florida limited partnership and affiliate of the General Partners.

         During 2002,  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 Partnership's  total rental revenues (including the
Partnership's  share of 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, 2002, 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
the  Partnership's  total rental revenues in 2003. In addition,  four Restaurant
Chains,   Long  John  Silver's,   Hardee's,   Golden  Corral  Family  Steakhouse
Restaurants ("Golden Corral"), and Burger King, each accounted for more than ten
percent of the  Partnership's  total rental  revenues during 2002 (including the
Partnership's  share of 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 four Restaurant
chains  each  will  continue  to  account  for  more  than  ten  percent  of the
Partnership's  total rental  revenues under the terms of the leases in 2003. Any
failure of these  lessees  or  Restaurant  Chains  could  materially  affect the
Partnership's  income if the  Partnership is not able to re-lease the Properties
in a timely manner.

         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,  as compared to the same period in 2001,  was  partially
attributable to a decrease in the costs incurred for administrative expenses for
servicing  the  Partnership  and its  Properties,  and a  decrease  in state tax
expense.  In  addition,  the  decrease in operating  expenses  during 2002,  was
partially due to lower Property  expenses  relating to Properties  with a tenant
who was experiencing financial difficulties; the leases of these Properties have
been assigned to new tenants.

         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.

         Effective  January  1,  2002,  the  Partnership  adopted  Statement  of
Financial  Accounting  Standards  No.  144  "Accounting  for the  Impairment  or
Disposal of Long-Lived  Assets." This statement requires that a long-lived asset
be tested  for  recoverability  whenever  events  or  changes  in  circumstances
indicate that its carrying amount may not be recoverable. The carrying amount of
a long-lived  asset is not recoverable if it exceeds the sum of the undiscounted
cash flows  expected  to result  from the use and  eventual  disposition  of the
asset.  The assessment is based on the carrying  amount of the asset at the date
it is tested for  recoverability.  An  impairment  loss is  recognized  when the
carrying  amount of a long-lived  asset exceeds its 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.

         During the years ended  December 31, 2002, the  Partnership  identified
and sold two Properties 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  majority  of the net sales  proceeds  were  reinvested  in two
Properties in Houston, Texas and Lee's Summit, Missouri.

Comparison  of the year ended  December 31, 2001 to the year ended  December 31,
2000

         During the years  ended  December  31, 2001 and 2000,  the  Partnership
recognized  $2,966,922 and $3,040,306,  respectively,  in rental  revenues.  The
decrease in rental  revenues during 2001, as compared to 2000, was primarily due
to the fact that the Partnership sold its Property in Mount Airy, North Carolina
in April 2001.  Rental  revenues are expected to remain at reduced amounts while
equity in  earnings of joint  ventures  is expected to increase  due to the fact
that the Partnership  reinvested the majority of net sales proceeds  relating to
this sale,  in a Property in Blue  Springs,  Missouri  with an  affiliate of the
General Partners, as tenants-in-common.

         During the years ended December 31, 2001 and 2000, the Partnership also
earned $195,058 and $241,831,  respectively,  in contingent  rental income.  The
decrease in  contingent  rental  income  during 2001,  as compared to 2000,  was
partially  attributable  to a decrease  in gross  sales for  certain  restaurant
Properties whose leases require the payment of contingent rental income.

         In addition,  during the years ended  December  31, 2001 and 2000,  the
Partnership  earned  $309,381 and $244,344,  respectively,  attributable  to net
income earned by joint ventures in which the  Partnership is a co-venturer.  The
increase in net income  earned by joint  ventures  during  2001,  as compared to
2000, was primarily attributable to 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,  as tenants-in-common  with CNL XV. The increase in net
income  earned by joint  ventures,  during  2001,  is also  partially  due to an
increase in contingent rental income  attributable to an increase in gross sales
of 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 CNL Income Fund III, Ltd.,
CNL Income Fund VII, Ltd., and CNL Income Fund X, Ltd.,  each a Florida  limited
partnership and affiliate of the General Partners.

         During the years ended December 31, 2001 and 2000, the Partnership also
earned $25,189 and $47,234, respectively, in interest and other income. Interest
and other income were higher during 2000,  as compared to 2001,  due to interest
earned  on the net sales  proceeds  received  from the 1999 sale of a  Property,
pending  reinvestment  in  construction  and  renovation  costs  relating to two
Properties.

         Operating expenses,  including  depreciation and amortization  expense,
and provisions  for write-down of assets were $873,653 and $701,272,  during the
years ended December 31, 2001 and 2000, respectively.  The increase in operating
expenses  during 2001,  as compared to 2000,  was partially  attributable  to an
increase in the costs  incurred for  administrative  expenses for  servicing the
Partnership and its Properties,  as permitted by the Partnership agreement,  and
additional  state  taxes in  several  states in which the  Partnership  conducts
business.  In addition,  during 2001, the Partnership  incurred expenses such as
legal  fees  relating  to  several  Properties  with a  tenant  who  experienced
financial  difficulties  and assigned the leases to a new tenant,  for which the
Partnership  approved the assignment.  The Partnership incurred additional legal
fees due to lease amendments relating to these assignments. The General Partners
do not  anticipate  that the  Partnership  will  continue  to incur  legal  fees
relating to these Properties.

         In  addition,  the  increase in  operating  expenses  during  2001,  as
compared to 2000,  was  partially  attributable  to an increase in  depreciation
expense  due to the fact that the tenant of the  Property  in  Peoria,  Arizona,
assigned  its lease to Denny's,  Inc. In  connection  with the  assignment,  the
Partnership  reclassified  this asset from net  investment  in direct  financing
leases  to  real  estate  properties  with  operating  leases.  No  loss  on the
reclassification of the direct financing lease was incurred.

         In March 2001, the  Partnership  recorded a provision for write-down of
assets of $56,506 for the Property in Mount Airy, North Carolina.  The provision
represented  the  difference  between the carrying value of the Property and the
net sales proceeds received in April 2001 from the sale of this Property. During
2000,  the  Partnership  recorded  a  provision  for  write-down  of  assets  of
approximately  $51,600  relating  to two  Denny's  Properties  due to  financial
difficulties  the tenant  experienced.  The provisions  represent the difference
between  the  carrying  value of the  Property  at  December  31, 2000 and their
estimated fair value.

         The  restaurant  industry  has been  relatively  resilient  during this
volatile time with steady performance during 2002. However, the industry remains
in a state of cautious optimism.  Restaurant  operators expect their business to
be better in 2003,  according to a nationwide  survey  conducted by the National
Restaurant  Association,   but  are  concerned  by  the  budget  deficits  being
experienced  by many states and the  potential  of new taxes on the  industry to
alleviate the situation.

         The  Partnership's  leases  as of  December  31,  2002,  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,  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 (more  commonly  referred to as  special-purpose  entities or
off-balance sheet  structures),  FIN 46 requires that a variable interest entity
be considered 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.  Consolidation  of  variable
interests  entities will provide more complete  information about the resources,
obligations,   risks  and  opportunities  of  the  consolidated   company.   The
consolidation  requirements  of FIN 46 apply  immediately  to variable  interest
entities  created  after  January 31, 2003,  and to older  entities in the first
fiscal year or interim period beginning after June 15, 2003. Management believes
adoption  of this  standard  may result in either  consolidation  or  additional
disclosure  requirements with respect to the Partnership's  unconsolidated joint
ventures  or  Properties  held  with  affiliates  of  the  General  Partners  as
tenants-in-common,  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,  2002 and 2001,  and the results of its
operations  and its cash flows for each of the three  years in the period  ended
December 31, 2002 in conformity with accounting principles generally accepted in
the United  States of  America.  In  addition,  in our  opinion,  the  financial
statement  schedule 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  schedule are the  responsibility  of the Partnership's
management;  our  responsibility  is to express  an  opinion on these  financial
statements and financial  statement  schedule 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  Standard  No.  144
"Accounting for the Impairment or Disposal of Long-Lived Assets."




/s/ PricewaterhouseCoopers LLP

Orlando, Florida
January 31, 2003

<page>


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

                                 BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                                           December 31,
                                                                                2002                        2001
                                                                       -----------------------      ----------------------

 <c>
                                   ASSETS


Real estate properties with operating leases, net                            $     21,048,701             $    20,079,603
Net investment in direct financing leases                                           5,561,235                   5,182,644
Real estate held for sale                                                                  --                   1,921,588
Investment in joint ventures                                                        3,211,480                   3,318,655
Cash and cash equivalents                                                           1,275,846                     785,750
Receivables, less allowance for doubtful accounts
     of $3,222 in 2002                                                                 76,653                      46,553
Accrued rental income                                                               1,932,122                   1,796,805
Other assets                                                                           35,964                      17,835
                                                                       -----------------------      ----------------------

                                                                             $     33,142,001             $    33,149,433
                                                                       =======================      ======================



         LIABILITIES AND PARTNERS' CAPITAL


Accounts payable and accrued expenses                                          $        7,851               $       5,945
Escrowed real estate taxes payable                                                      4,410                       5,372
Distributions payable                                                                 850,002                     850,002
Due to related parties                                                                 20,593                      15,534
Rents paid in advance and deposits                                                    147,147                      91,470
Deferred rental income                                                                 23,800                      25,448
                                                                       -----------------------      ----------------------
        Total liabilities                                                           1,053,803                     993,771



Partners' capital                                                                  32,088,198                  32,155,662
                                                                       -----------------------      ----------------------

                                                                             $     33,142,001             $    33,149,433
                                                                       =======================      ======================
</TABLE>
                See accompanying notes to financinal statements.
<page>


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

                              STATEMENTS OF INCOME

<TABLE>
<CAPTION>

                                                                                      Year Ended December 31,
                                                                             2002              2001              2000
                                                                        ----------------  ----------------  ---------------

 <c>
   Revenues
       Rental income from operating leases                                 $  2,456,253       $ 2,387,542      $ 2,313,167
       Earned income from direct financing leases                               552,348           579,380          727,139
       Contingent rental income                                                 269,673           195,058          241,831
       Interest and other income                                                  5,522            25,189           47,234
                                                                        ----------------  ---------------   ---------------
                                                                              3,283,796         3,187,169        3,329,371
                                                                        ----------------  ----------------  ---------------

   Expenses:
       General operating and administrative                                     277,735           303,238          188,102
       Property Expenses                                                         31,393            35,238           10,489
       Management fees to related parties                                        37,535            36,671           36,142
       State and other taxes                                                     38,715            57,457           21,731
       Depreciation and amortization                                            395,028           384,543          357,944
       Provision for write-down of assets                                            --            56,506           51,618
       Transaction costs                                                             --                --           35,246
                                                                        ----------------  ---------------   ---------------
                                                                                780,406           873,653          701,272
                                                                        ----------------  ----------------  ---------------

   Income Before Equity in Earnings of Joint Ventures                         2,503,390         2,313,516        2,628,099

   Equity in Earnings of Joint Ventures                                         307,776           309,381          244,344
                                                                        ----------------  ----------------  ---------------

   Income from Continuing Operations                                          2,811,166         2,622,897        2,872,443
                                                                        ----------------  ----------------  ---------------

   Discontinued Operations (Note 5):
       Income from discontinued operations                                      190,902           212,924          216,854
       Gain on disposal of discontinued operations                              330,476                --               --
                                                                        ----------------  ----------------  ---------------
                                                                                521,378           212,924          216,854
                                                                        ----------------  ----------------  ---------------

   Net Income                                                              $  3,332,544       $ 2,835,821      $ 3,089,297
                                                                        ================  ================  ===============

   Net Income Per Limited Partner Unit:
       Continuing Operations                                                 $     0.70         $    0.66        $    0.72
       Discontinued Operations                                                     0.13              0.05             0.05
                                                                        ----------------  ----------------  ---------------

       Total                                                                 $     0.83        $     0.71        $    0.77
                                                                        ================  ================  ===============

   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, 2002, 2001 and 2000

<TABLE>
<CAPTION>

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

 <c>
Balance, December 31, 1999        $     1,000   $    190,934   $  40,000,000  $ (21,128,416) $  18,632,211  $ (4,665,169)

    Distributions to limited
       partners ($0.85 per
       limited partner unit)               --             --              --     (3,400,008)            --            --
    Net income                             --             --              --             --      3,089,297            --
                                 ------------- -------------- --------------- -------------- -------------- -------------

Balance, December 31, 2000              1,000        190,934      40,000,000    (24,528,424)    21,721,508    (4,665,169)

    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    (4,665,169)

    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  $ (4,665,169)
                                 ============= ============== =============== ============== ============== =============
</TABLE>

                 See accompanying notes to financial statements.


      Total
---------------

   $ 33,030,560



     (3,400,008)
      3,089,297
 ---------------

     32,719,849



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

     32,155,662



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

   $ 32,088,198
 ===============

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

                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                           Year Ended December 31,
                                                             2002                  2001                 2000
                                                       -----------------     -----------------    -----------------

 <c>
Increase (Decrease) in Cash and Cash
    Equivalents:

Cash Flows from Operating Activities:
       Net income                                         $   3,332,544         $   2,835,821        $   3,089,297
                                                       -----------------     -----------------    -----------------
       Adjustments to reconcile net income to net
          cash provided by operating activities:
              Depreciation                                      403,070               410,264              383,489
              Amortization                                          984                 1,808                1,981
              Equity in earnings of joint
                ventures, net of distributions                  106,643                (1,591 )             10,613
              Provision for write-down of assets                105,193                56,506               51,618
              Gain on sale or assets                           (330,476 )                  --                   --
              Decrease (increase) in receivables                (30,100 )             196,533             (107,654 )
              Amortization of investment in
                direct financing leases                         127,811               109,275              107,487
              Increase in accrued rental income                (142,676 )            (184,152 )           (178,371 )
              Decrease (increase) in other assets               (18,130 )              13,393              (15,264 )
              Increase (decrease) in accounts
                payable, accrued expenses, and
                escrowed real estate taxes payable                  944               (27,056 )           (108,030 )
              Increase (decrease) in due to
                related parties                                   5,059              (117,137 )             63,437
              Increase in rents paid in advance
                and deposits                                     54,029                 9,168               61,431
                                                       -----------------     -----------------    -----------------
                   Total adjustments                            282,351               467,011              270,737
                                                       -----------------     -----------------    -----------------

Net Cash Provided by Operating Activities                     3,614,895             3,302,832            3,360,034
                                                       -----------------     -----------------    -----------------

Cash Flows from Investing Activities:
    Proceeds from sale of Real Estate Properties              2,144,163               947,000                   --
    Additions to Real Estate Properties                      (1,868,954 )                  --              (87,597 )
    Investment in joint ventures                                     --              (882,305 )                 --
                                                       -----------------     -----------------    -----------------

        Net cash provided by (used in)
              investing activities                              275,209                64,695              (87,597 )
                                                       -----------------     -----------------    -----------------


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                                               490,096               (32,481 )           (127,571 )

Cash and Cash Equivalents at Beginning of Year                  785,750               818,231              945,802
                                                       -----------------     -----------------    -----------------


Cash and Cash Equivalents at End of Year               $      1,275,846          $    785,750         $    818,231

                                                       =================     =================    =================
</TABLE>
                See accompanying notes to financial statements.
<page>

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

                       STATEMENT OF CASH FLOWS - CONTINUED

<TABLE>
<CAPTION>

                                                                                Year Ended December 31,

                                                                  2002                 2001                 2000
                                                            -----------------    -----------------    -----------------

 <c>
      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, 2002, 2001 and 2000

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,  2002,  2001,  and 2000,  tenants  paid
         directly  to real estate  taxing  authorities  approximately  $523,100,
         $501,300,  and  $453,000,   respectively,   in  real  estate  taxes  in
         accordance  with  the  terms  of  their  triple  net  leases  with  the
         Partnership.  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 direct financing or the operating methods.  Such methods are
         described below:

                  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.

                  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.

                  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, 2002, 2001 and 2000


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 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, and Blue
         Springs,   Missouri,  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 (some of which are
         backed by government  securities).  Cash equivalents are stated at cost
         plus accrued interest, which approximates market value.

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

         Lease Costs - Other assets include lease  incentive costs and brokerage
         and legal fees associated with  negotiating  leases,  and are amortized
         over the term of the new lease using the straight-line method.

         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, 2002, 2001, and 2000


1.       Significant Accounting Policies - Continued:

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

         Reclassification   -  Certain  items  in  the  prior  year's  financial
         statements  have been  reclassified  to conform  to 2002  presentation,
         including a change in  presentation of the statement of cash flows from
         the  direct to the  indirect  method.  These  reclassifications  had no
         effect on partner's capital, net income or cash flows.

         Statement  of  Financial  Accounting  Standards  No. 144 ("FAS  144") -
         Effective  January  1,  2002,  the  Partnership  adopted  Statement  of
         Financial  Accounting  Standards No. 144 "Accounting for the Impairment
         or Disposal of  Long-Lived  Assets."  This  statement  requires  that a
         long-lived  asset be  tested  for  recoverability  whenever  events  or
         changes in  circumstances  indicate that its carrying amount may not be
         recoverable.   The  carrying  amount  of  a  long-lived  asset  is  not
         recoverable  if it  exceeds  the  sum of the  undiscounted  cash  flows
         expected to result from the use and eventual  disposition of the asset.
         The assessment is based on the carrying amount of the asset at the date
         it is tested for recoverability.  An impairment loss is recognized when
         the carrying  amount of a long-lived  asset exceeds its 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 ("FIN 46") - In January 2003,  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   (more   commonly   referred   to   as
         special-purpose  entities  or  off-balance  sheet  structures),  FIN 46
         requires that a variable  interest entity be considered 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.  Consolidation of
         variable  interests  entities  will provide more  complete  information
         about  the  resources,  obligations,  risks  and  opportunities  of the
         consolidated  company.  The consolidation  requirements of FIN 46 apply
         immediately  to variable  interest  entities  created after January 31,
         2003,  and to older entities in the first fiscal year or interim period
         beginning  after June 15, 2003.  Management  believes  adoption of this
         standard may result in either  consolidation  or additional  disclosure
         requirements  with respect to the  Partnership's  unconsolidated  joint
         ventures or properties held with affiliates of the general  partners as
         tenants-in-common,  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, 2002, 2001, and 2000


2.       Real Estate Properties with Operating Leases - Continued:

         Real estate properties with operating leases consisted of the following
         at December 31:

                                               2002                2001
                                        -----------------   -------------------

          Land                           $   12,668,461     $   11,709,962
          Buildings                          11,718,056         11,312,961
                                        -----------------   -------------------
                                             24,386,517         23,022,923
          Less accumulated depreciation      (3,337,816)        (2,943,320)
                                        -----------------   -------------------

                                         $   21,048,701     $   20,079,603
                                        =================   ===================

         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, 2002:

                      2003                                  $  2,448,420
                      2004                                     2,533,477
                      2005                                     2,549,409
                      2006                                     2,586,439
                      2007                                     2,599,146
                      Thereafter                              13,738,360
                                                       ------------------

                                                            $ 26,455,251
                                                       ==================

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>

                                                              2002                       2001
                                                      ----------------------     ----------------------

 <c>
                  Minimum lease payments receivable         $     8,908,514               $  8,355,651
                  Estimated residual values                       2,024,743                  1,829,775
                  Less unearned income                           (5,372,022)                (5,002,782)
                                                      ----------------------     ----------------------

                  Net investment in direct financing
                      leases                                $     5,561,235               $  5,182,644
                                                      ======================     ======================
</TABLE>

<page>

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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2002, 2001, and 2000


3.       Net Investment in Direct Financing Leases - Continued:

         During 2001 the  Partnership  recorded a provision  for  write-down  of
         assets of $56,506 for the property in Mount Airy,  North Carolina.  The
         provision  represented the difference between the carrying value of the
         property at and the net sales proceeds  received in April 2001 from the
         sale of this  property,  for  which  the  land  and  building  had been
         classified as a direct financing  lease. The gross investment  (minimum
         lease  payments  receivable and the estimated  residual  value) and the
         unearned income relating to the land and building were removed from the
         accounts.

         During 2001, one of the Partnership's  leases was amended. As a result,
         the Partnership  reclassified the amended lease from a direct financing
         lease to real estate  properties with operating  leases. No loss on the
         reclassification of the direct financing lease was recorded.

         The  following  is a schedule of future  minimum  lease  payments to be
         received on direct financing leases at December 31, 2002:

                           2003                   $   729,455
                           2004                       735,418
                           2005                       735,418
                           2006                       744,129
                           2007                       756,324
                           Thereafter               5,207,770
                                             -----------------

                                                 $  8,908,514
                                             =================

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, 2002, the
         Partnership  owned  a  66.13%,   63.09%,   47.83%,  and  41%  interest,
         respectively, in the properties.

         Attalla Joint Venture,  Salem Joint Venture,  and the  Partnership  and
         affiliates,  as  tenants-in-common  in four separate  tenancy-in-common
         arrangements,  each  own and  lease  one  property  to an  operator  of
         national fast-food or family-style restaurants.

         In April  2001,  the  Partnership  used the  majority  of the net sales
         proceeds from the sale of its property in Mount Airy, North Carolina to
         acquire  an  interest  in a Golden  Corral  property  in Blue  Springs,
         Missouri,  as  tenants-in-common,  with CNL Income  Fund XV,  Ltd.,  an
         affiliate of the general partners.  The Partnership and CNL Income Fund
         XV, Ltd.,  as  tenants-in-common,  acquired  this  interest from CNL BB
         Corp., an affiliate of the general partners.  The Partnership  accounts
         for its investment using the equity method since the agreement requires
         the  consent  of  all  partners  on all  key  decisions  affecting  the
         operations of the  underlying  property.  As of December 31, 2002,  the
         Partnership owned a 41% interest in this property.

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

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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2002, 2001, and 2000


4.       Investment in Joint Ventures - Continued:

<TABLE>
<CAPTION>

                                                                                  December 31,
                                                                          2002                   2001
                                                                     ----------------       ----------------

 <c>
               Real estate properties with operating leases, net     $  5,853,726           $  6,045,197
               Net investment in direct financing lease                   339,093                344,884
               Cash                                                        42,733                 41,693
               Receivables                                                  4,849                 67,370
               Accrued rental income                                      403,428                377,299
               Other assets                                                   165                  1,028
               Liabilities                                                 22,001                 20,621
               Partners' capital                                        6,621,993              6,856,850

                                                                            Year Ended December 31,
                                                                2002                2001               2000
                                                         -------------------- ------------------ -----------------

         Rental revenues                                       $     773,934  $         760,782    $      568,987
         Expenses                                                   (139,047 )         (129,936 )         (92,009 )
                                                         -------------------- ------------------ -----------------

         Net Income (Loss)                                     $     634,887  $         630,846   $       476,978
                                                         ==================== ================== =================
</TABLE>

         The Partnership  recognized  income totaling  $307,776,  $309,381,  and
         $244,344,  for the  years  ended  December  31,  2002,  2001,  and 2000
         respectively,  from these joint  ventures  and the  properties  held as
         tenants-in-common with affiliates.

5.       Discontinued Operations:

         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, 2002, 2001, and 2000


5.       Discontinued Operations - Continued:

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

                                                                            Year Ended December 31,
                                                                2002                2001               2000
                                                         -------------------- ------------------ -----------------

 <c>
         Rental revenues                                       $     126,816       $    241,295      $    233,287
         Termination fee income                                      147,750                 --                --
         Other income                                                 31,898                 --            11,093
         Expenses                                                    (10,369 )          (28,371 )         (27,526 )
         Provision for write-down of assets                         (105,193 )               --                --
         Gain on disposal of assets                                  330,476                 --                --
                                                         -------------------- ------------------ -----------------

         Income from discontinued operations                   $     521,378       $    212,924      $    216,854
                                                         ==================== ================== =================
</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 percent 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 percent 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 percent
         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 percent
         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 percent 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, 2002, 2001, and 2000


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, 2002, 2001, and 2000.

         During each of the years ended  December 31, 2002,  2001, and 2000, 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>
                                                                          2002            2001            2000
                                                                     --------------- --------------- ---------------

 <c>

         Net income for financial reporting purposes                    $ 3,332,544     $ 2,835,821     $ 3,089,297

         Effect to timing differences relating to depreciation              (51,854)        (54,090)        (95,523)

         Direct financing leases recorded as operating leases for
              tax reporting purposes                                        127,812         109,275         107,487

         Deduction of transaction costs for tax reporting purposes               --              --        (215,307)

         Effect to timing differences relating to equity in
              earnings of joint ventures                                      1,691         (19,015)        (14,242)

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

         Provision for write-down of assets                                      --          56,506          51,618

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

         Accrued rental income                                              (67,379)       (184,152)       (178,371)

         Rents paid in advance                                               66,510           9,168          61,431
                                                                     --------------- --------------- ---------------

         Net income for federal income tax purposes                     $ 3,343,862     $ 2,814,418     $ 2,812,064
                                                                     =============== =============== ===============
</TABLE>
<page>
                           CNL INCOME FUND XIII, LTD.
                         (A Florida Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2002, 2001, and 2000


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 American
         Properties Fund, Inc. ("APF") 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.  (formerly known as CNL
         Restaurants  XVIII,  Inc.). RAI Restaurants,  Inc. ("the Advisor") is a
         wholly owned  subsidiary of APF. The  individual  general  partners are
         stockholders and directors of APF.

         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 $37,535, $36,671,
         and $36,142,  for the years ended  December 31, 2002,  2001,  and 2000,
         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 April 2001, the Partnership and CNL Income Fund XV, Ltd. ("CNL XV"),
         as tenants-in-common,  acquired an interest in a Golden Corral property
         from  CNL  BB  Corp.,  an  affiliate  of  the  general  partners,   for
         approximately  $2,152,000.  CNL  XV  is an  affiliate  of  the  general
         partners. CNL BB Corp. had purchased and temporarily held title to this
         property in order to facilitate the  acquisition of the property by the
         Partnership and CNL XV, as  tenants-in-common.  The purchase price paid
         by the  Partnership  and CNL XV, as  tenants-in-common,  represents the
         costs incurred by CNL BB Corp. to acquire and carry the property.

         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, an affiliate of the general  partners,  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.
<page>
                           CNL INCOME FUND XIII, LTD.
                         (A Florida Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2002, 2001, and 2000


8.       Related Party Transactions - Continued:

         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.  ("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,  2002,  2001,  and  2000,  the
         Partnership's  advisor  and  its  affiliates  provided  accounting  and
         administrative  services.  For the years ended December 31, 2002, 2001,
         and 2000,  the expenses  incurred  for these  services  were  $199,488,
         $211,205, and $99,772, respectively.

         The amount due to related parties at December 31, 2002 and 2001 totaled
         $20,593 and $15,534, 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 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>

                                                2002                2001               2000
                                           ---------------     ---------------    ----------------

 <c>
         Golden Corral Corp.                   $  676,458        $    616,239       $     548,540
         Flagstar Enterprises, Inc.               635,823             640,524             644,467
         Long John Silver's, Inc.                 403,920             414,556             415,012
</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  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>

                                                                   2002                2001               2000
                                                              ---------------     ---------------    ----------------

 <c>
         Hardee's                                                 $  600,918          $  640,524          $  644,467
         Golden Corral Family Steakhouse Restaurants                 583,920             616,239             548,540
         Long John Silver's                                          403,920             414,556             415,012
         Burger King                                                 337,290             412,489             454,645

</TABLE>
<page>

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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2002, 2001, and 2000


9.       Concentration of Credit Risk - Continued:

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

10.      Selected Quarterly Financial Data:

         The following table presents  selected  unaudited  quarterly  financial
         data for each full quarter during the years ended December 31, 2002 and
         2001:
<TABLE>
<CAPTION>

                  2002 Quarter                 First          Second          Third          Fourth           Year
        ---------------------------------    ----------     ------------    -----------    -----------     ------------

 <c>
        Continuing Operations (1):
            Revenues                           $786,877         $788,839       $831,438       $876,642       $3,283,796
            Equity in earnings of 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 (1):
            Revenues                             89,603           54,084        162,777             --          306,464
            Income (loss) from discontinued
              operations                        (23,158 )        355,117        189,419             --          521,378

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

        Net 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
                                             ----------     ------------    -----------    -----------     ------------
            Total                                $ 0.15          $  0.26        $  0.23        $  0.19          $  0.83
                                             ==========     ============    ===========    ===========     ============
</TABLE>

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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2002, 2001, and 2000


10.      Selected Quarterly Financial Data - Continued:
<TABLE>
<CAPTION>

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

 <c>
        Continuing Operations (1):
            Revenues                          $790,061       $808,410       $777,991        $810,707     $3,187,169
            Equity in earnings of joint
              ventures                          60,649         78,791         89,994          79,947        309,381
            Income from continuing
              operations                       481,507        706,474        711,919         722,997      2,622,897

        Discontinued Operations (3):
            Revenues                            58,381         68,877         52,612          61,425        241,295
            Income from discontinued
              operations                        51,499         61,995         45,725          53,705        212,924

        Net Income                             533,006        768,469        757,644         776,702      2,835,821

        Net income per limited
          partner unit:
            Continuing operations              $  0.12        $  0.17        $  0.18         $  0.19       $   0.66
            Discontinued operations               0.01           0.02           0.01            0.01           0.05
                                            -----------    -----------    -----------    ------------   ------------
            Total                              $  0.13        $  0.19        $  0.19         $  0.20       $   0.71
                                            ===========    ===========    ===========    ============   ============
</TABLE>

(1)      Certain items in the quarterly financial data have been reclassified to
         conform to the 2002 presentation.  This  reclassification had no effect
         on total net income.  The results of operations  relating to properties
         that were either  disposed of or were classified as held for sale as of
         December  31, 2002 are  reported  as  discontinued  operations  for all
         periods  presented.  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.
<page>
Item 9.  Changes in and Disagreements with Accountants on Accounting and
         Financial  Disclosures

         None.

                                    PART III


Item 10.  Directors and Executive Officers of the Registrant

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

         James M. Seneff, Jr., age 56. 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 APF, a public,  unlisted  real
estate  investment  trust,  since 1994.  Mr.  Seneff  served as Chief  Executive
Officer  of APF from 1994  through  August  1999,  and has  served  as  co-Chief
Executive  Officer of APF since  December 2000. Mr. Seneff served as Chairman of
the Board and Chief Executive Officer of CNL Fund Advisors,  Inc.,  formerly the
Partnership's advisor, until it merged with a wholly-owned  subsidiary of APF in
September  1999, and in June 2000, was re-elected to those positions of CNL Fund
Advisors, Inc. Mr. Seneff is a principal stockholder of CNL Holdings,  Inc., the
parent  company of CNL  Financial  Group,  Inc.  (formerly CNL Group,  Inc.),  a
diversified real estate company,  and has served as a Director,  Chairman of the
Board and  Chief  Executive  Officer  of CNL  Financial  Group,  Inc.  since its
formation in 1980.  CNL  Financial  Group,  Inc. is the parent  company,  either
directly or indirectly through subsidiaries,  of CNL Real Estate Services, Inc.,
CNL Capital Markets,  Inc., CNL Investment Company and CNL Securities Corp., all
of which are engaged in the  business of real estate  finance.  Mr.  Seneff also
serves as a Director,  Chairman of the Board and Chief Executive  Officer of CNL
Hospitality  Properties,  Inc., a public, unlisted real estate investment trust,
as well as, CNL  Hospitality  Corp.,  its advisor.  In addition,  he serves as a
Director,  Chairman of the Board and Chief  Executive  Officer of CNL Retirement
Properties,  Inc.,  a public,  unlisted  real  estate  investment  trust and its
advisor,  CNL  Retirement  Corp.  Since  1992,  Mr.  Seneff has also served as a
Director,  Chairman of the Board and Chief  Executive  Officer of Commercial Net
Lease Realty,  Inc., a public real estate investment trust that is listed on the
New York Stock Exchange.  Mr. Seneff has also served as a Director,  Chairman of
the Board and Chief Executive  Officer of CNL Securities  Corp.  since 1979; CNL
Investment  Company  since  1990;  and  CNL  Institutional  Advisors,   Inc.,  a
registered investment advisor for pension plans, since 1990. Mr. Seneff formerly
served  as a  Director  of First  Union  National  Bank of  Florida,  N.A.,  and
currently  serves as the  Chairman  of the Board of CNL  Bank,  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 more than $60 billion of
retirement funds. Mr. Seneff received his degree in Business Administration from
Florida State University in 1968.

         Robert A.  Bourne,  age 55. Mr.  Bourne has  participated  as a general
partner  or  co-venturer  in over  100  real  estate  ventures  involved  in the
financing,  acquisition,   construction,  and  leasing  of  restaurants,  office
buildings,  apartment complexes,  hotels, and other real estate. Mr. Bourne is a
Director  of APF.  Mr.  Bourne  served as  President  of APF from  1994  through
February  1999. He also served as Treasurer  from  February 1999 through  August
1999  and from May  1994  through  December  1994.  He also  served  in  various
executive  positions  with CNL Fund  Advisors,  Inc.  prior to its merger with a
wholly-owned subsidiary of APF including,  President from 1994 through September
1997, and Director from 1994 through August 1999. Mr. Bourne serves as President
and  Treasurer of CNL  Financial  Group,  Inc.;  Director,  Vice Chairman of the
Board, and Treasurer , and from 1997 until June 2002 served as President, of CNL
Hospitality  Properties,  Inc., a public, unlisted real estate investment trust;
as well as, Director,  Vice Chairman of the Board, and Treasurer,  and from 1997
until June 2002 served as President,  of CNL Hospitality Corp., its advisor.  In
addition,  Mr.  Bourne  serves as  Director,  Vice  Chairman  of the Board,  and
Treasurer,  and from 1997 until June 2002 served as President, of CNL Retirement
Properties, Inc., a public, unlisted real estate investment trust; as well as, a
Director,  Vice Chairman of the Board,  and Treasurer,  and from 1997 until June
2002 served as President,  of its advisor,  CNL Retirement Corp. Mr. Bourne also
serves as a Director of CNL Bank. He has served as a Director  since 1992,  Vice
Chairman of the Board since February 1996, Secretary and Treasurer from February
1996 through  1997,  and  President  from July 1992 through  February  1996,  of
Commercial Net Lease Realty,  Inc., a public real estate investment trust listed
on the New York Stock  Exchange.  Mr. Bourne also serves as Director,  President
and Treasurer for various affiliates of CNL Financial Group, Inc. including, CNL
Investment Company, CNL Securities Corp. and CNL Institutional Advisors, Inc., a
registered  investment advisor for pension plans. Mr. Bourne began his career as
a certified public  accountant  employed by Coopers & Lybrand,  Certified Public
Accountants,  from 1971  through  1978,  where he attained  the  position of Tax
Manager in 1975.  Mr. Bourne  graduated  from Florida  State  University in 1970
where he received a B.A. in Accounting, with honors.

         Curtis B.  McWilliams,  age 47. Mr.  McWilliams  has served as Co-Chief
Executive  Officer of APF since  December  2000 and  previously  served as Chief
Executive  Officer from  September  1999  through  December  2000.  Prior to the
acquisition of CNL Fund Advisors,  Inc., Mr.  McWilliams  served as President of
APF from  February  1999 until  September  1999.  From February 1998 to February
1999, he served as Executive  Vice President of APF. Mr.  McWilliams  joined CNL
Financial  Group,  Inc. in April 1997 and served as an Executive  Vice President
from October 1997 until September 1999. In addition,  Mr.  McWilliams  served as
President  of CNL Fund  Advisors,  Inc.  and CNL  Financial  Services,  Inc.,  a
corporation  engaged in the business of real estate  financing,  from April 1997
until the  acquisition of such entities by  wholly-owned  subsidiaries of APF in
September  1999.  From  September  1983 through March 1997,  Mr.  McWilliams was
employed by Merrill  Lynch & Co. The  majority of his career at Merrill  Lynch &
Co.  was in the  Investment  Banking  division  where he  served  as a  Managing
Director.  Mr.  McWilliams  received  a  B.S.E.  in  Chemical  Engineering  from
Princeton University in 1977 and a Master of Business Administration degree with
a concentration in finance from the University of Chicago in 1983.

         Steven  D.  Shackelford,  age  39.  Mr.  Shackelford  was  promoted  to
Executive Vice President of APF in June 2000. He served as Senior Vice President
from September 1999 until his promotion in June 2000. Mr. Shackelford has served
as Chief  Financial  Officer  since January 1997 and has served as Secretary and
Treasurer of APF since September 1999. He also served as Chief Financial Officer
of CNL Fund Advisors,  Inc. from September  1996 to September  1999.  From March
1995 to July 1996, Mr.  Shackelford  was a senior manager in the national office
of Price  Waterhouse LLP where he was responsible  for advising  foreign clients
seeking to raise capital and a public listing in the United States.  From August
1992 to March  1995,  he was a  manager  in the  Paris,  France  office of Price
Waterhouse, serving several multi-national clients. Mr. Shackelford was an audit
staff and  senior  from  1986 to 1992 in the  Orlando,  Florida  office of Price
Waterhouse.  Mr.  Shackelford  received a Bachelor of Arts degree in Accounting,
with honors, and a Master of Business  Administration  degree from Florida State
University and is a certified public accountant.

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 2002.


Item 11.  Executive Compensation

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


Item 12.  Security Ownership of Certain Beneficial Owners and Management

         As of March 10,  2003,  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 10, 2003,  the beneficial
ownership interests of the General Partners in the Registrant.
<TABLE>
<CAPTION>

                    Title of Class                           Name of Partner                 Percent of Class


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


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

         The Partnership does not have any equity compensation plans.


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, 2002,  exclusive of any  distributions  to which the General
Partners or their  affiliates  may be entitled by reason of their  purchase  and
ownership of Units.

<TABLE>
<CAPTION>
                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
         and Recipient                         Method of Computation                  Ended December 31, 2002
---------------------------------      --------------------------------------      ------------------------------

 <c>
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       $199,488
                                       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       $37,535
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>
</TABLE>

<TABLE>
<CAPTION>

                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
         and Recipient                         Method of Computation                  Ended December 31, 2002
---------------------------------      --------------------------------------      ------------------------------

 <c>
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.

</TABLE>
<page>
<TABLE>
<CAPTION>
                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
         And Recipient                         Method of Computation                  Ended December 31, 2002
---------------------------------      --------------------------------------      ------------------------------

 <c>
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>

         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,
an affiliate of the general  partners,  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. ("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.


Item 14.  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  within 90 days prior to the
filing  of this  Annual  Report  on Form  10-K and  have  determined  that  such
disclosure controls and procedures are effective.

         Subsequent to the above evaluation,  there were no significant  changes
in internal  controls or other  factors  that could  significantly  affect these
controls,   including  any   corrective   actions  with  regard  to  significant
deficiencies and material weaknesses.

                                     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
<TABLE>
<CAPTION>

 <c>
                  Report of Independent Certified Public Accountants

                  Balance Sheets at December 31, 2002 and 2001

                  Statements of Income for the years ended December 31, 2002, 2001, and 2000

                  Statements of Partners' Capital for the years ended December 31, 2002, 2001, and 2000

                  Statements of Cash Flows for the years ended December 31, 2002, 2001, and 2000

                  Notes to Financial Statements

         2.   Financial Statement Schedule

                  Schedule III - Real Estate and Accumulated Depreciation at December 31, 2002

                  Notes to Schedule III - Real Estate and Accumulated Depreciation at December 31, 2002

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

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.)

           99.1   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.)

           99.2   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, 2002 through December 31, 2002.

<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, 2003.


                                     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>

              Signature                                 Title                                   Date

 <c>

      /s/ Robert A. Bourne                     President,   Treasurer   and  Director             March 24, 2003
      -----------------------                  (Principal  Financial  and  Accounting
      Robert A. Bourne                         Officer)




      /s/ James M. Seneff, Jr.                 Chief  Executive  Officer and Director             March 24, 2003
      ------------------------                 (Principal Executive Officer)
      James M. Seneff, Jr.
</TABLE>

<page>

                    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


         I, James M.  Seneff,  Jr.,  the Chief  Executive  Officer of CNL Realty
Corporation,  the corporate  general  partner of CNL Income Fund XIII, Ltd. (the
"registrant"), certify that:

         1. I have reviewed this annual report on Form 10-K of the registrant;

         2. Based on my  knowledge,  this  annual  report  does not  contain any
            untrue statement of a material fact or omit to state a material fact
            necessary to make the statements made, in light of the circumstances
            under which such  statements  were made, not misleading with respect
            to the period covered by this annual report;

         3. Based on my knowledge, the financial statements, and other financial
            information  included in this annual  report,  fairly present in all
            material respects the financial condition, results of operations and
            cash flows of the  registrant as of, and for, the periods  presented
            in this annual report;

         4. The registrant's  other certifying officer and I are responsible for
            establishing and maintaining  disclosure controls and procedures (as
            defined in Exchange Act Rules 13a-14 and 15d-14) for the  registrant
            and have:

               a. designed  such  disclosure  controls and  procedures to ensure
                  that  material   information   relating  to  the   registrant,
                  including its consolidated  subsidiaries,  is made known to us
                  by others  within  those  entities,  particularly  during  the
                  period in which this annual report is being prepared;

               b. evaluated the  effectiveness  of the  registrant's  disclosure
                  controls and  procedures  as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation Date");
                  and

               c. presented  in this  annual  report our  conclusions  about the
                  effectiveness of the disclosure  controls and procedures based
                  on our evaluation as of the Evaluation Date;

         5. The  registrant's  other  certifying  officer and I have  disclosed,
            based on our most recent  evaluation,  to the registrant's  auditors
            and the audit  committee  of  registrant's  board of  directors  (or
            persons  performing the equivalent  functions):

               a. all  significant  deficiencies  in the design or  operation of
                  internal   controls   which   could   adversely   affect   the
                  registrant's ability to record, process,  summarize and report
                  financial  data  and  have  identified  for  the  registrant's
                  auditors any material weaknesses in internal controls; and

               b. any fraud,  whether or not material,  that involves management
                  or  other  employees  who  have  a  significant  role  in  the
                  registrant's internal controls; and

         6. The registrant's  other  certifying  officer and I have indicated in
            this annual report whether or not there were significant  changes in
            internal  controls  or in other  factors  that  could  significantly
            affect internal  controls  subsequent to the date of our most recent
            evaluation,   including  any  corrective   actions  with  regard  to
            significant deficiencies and material weaknesses.

Date:  March 24, 2003


/s/ James M. Seneff, Jr.
-------------------------
James M. Seneff, Jr.
Chief Executive Officer
<page>
                    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

         I, Robert A. Bourne, President and Treasurer of CNL Realty Corporation,
the corporate  general partner of CNL Income Fund XIII, Ltd. (the  "registrant")
certify that:

         1. I have reviewed this annual report on Form 10-K of the registrant;

         2. Based on my  knowledge,  this  annual  report  does not  contain any
            untrue statement of a material fact or omit to state a material fact
            necessary to make the statements made, in light of the circumstances
            under which such  statements  were made, not misleading with respect
            to the period covered by this annual report;

         3. Based on my knowledge, the financial statements, and other financial
            information  included in this annual  report,  fairly present in all
            material respects the financial condition, results of operations and
            cash flows of the  registrant as of, and for, the periods  presented
            in this annual report;

         4. The registrant's  other certifying officer and I are responsible for
            establishing and maintaining  disclosure controls and procedures (as
            defined in Exchange Act Rules 13a-14 and 15d-14) for the  registrant
            and have:

               a. designed  such  disclosure  controls and  procedures to ensure
                  that  material   information   relating  to  the   registrant,
                  including its consolidated  subsidiaries,  is made known to us
                  by others  within  those  entities,  particularly  during  the
                  period in which this annual report is being prepared;

               b. evaluated the  effectiveness  of the  registrant's  disclosure
                  controls and  procedures  as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation Date");
                  and

               c. presented  in this  annual  report our  conclusions  about the
                  effectiveness of the disclosure  controls and procedures based
                  on our evaluation as of the Evaluation Date;

         5. The  registrant's  other  certifying  officer and I have  disclosed,
            based on our most recent  evaluation,  to the registrant's  auditors
            and the audit  committee  of  registrant's  board of  directors  (or
            persons performing the equivalent functions):

               a. all  significant  deficiencies  in the design or  operation of
                  internal   controls   which   could   adversely   affect   the
                  registrant's ability to record, process,  summarize and report
                  financial  data  and  have  identified  for  the  registrant's
                  auditors any material weaknesses in internal controls;  and

               b. any fraud,  whether or not material,  that involves management
                  or  other  employees  who  have  a  significant  role  in  the
                  registrant's internal controls; and

         6. The registrant's  other  certifying  officer and I have indicated in
            this annual report whether or not there were significant  changes in
            internal  controls  or in other  factors  that  could  significantly
            affect internal  controls  subsequent to the date of our most recent
            evaluation,   including  any  corrective   actions  with  regard  to
            significant deficiencies and material weaknesses.


Date:  March 24, 2003


/s/ Robert A. Bourne
---------------------
Robert A. Bourne
President and Treasurer
<page>

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

             SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 2002


<TABLE>
<CAPTION>

                                                                              Costs Capitalized
                                                                              Subsequent To
                                                     Initial Cost             Acquisition
                                          ------------------------  ---------------------
                            Encum-                     Buildings andImprove-    Carrying
                            brances          Land       Improvements  ments     Costs
                           ----------     -----------  -----------------------  -------

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

    Arby's Restaurant:
      Philadelphia, Pennsylvani- (j)        $274,580            -           -        -
      Lee's Summit, Missouri (n-             445,638            -           -        -

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

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

    Denny's Restaurants:
      Peoria, Arizona (i)      -             460,107            -     552,207        -
      Mesa, Arizona            -             530,494            -     540,983        -

    Golden Corral Family
      Steakhouse Restaurants:
      Dallas, Texas            -             611,589    1,071,838           -        -
      San Antonio, Texas       -             625,527      964,122           -        -
      Panama City, Florida     -             617,016            -   1,103,437        -

    Hardee's  Restaurants:
      Ashland, Alabama         -             197,336      417,418           -        -
      Bloomingdale, Tennessee  -             160,149      424,977           -        -
      Blytheville, Arkansas    -             164,004            -           -        -
      Chapin, South Carolina   -             218,639      460,364           -        -
      Kingsport, Tennessee     -             204,516            -           -        -
      Opelika, Alabama         -             240,363      412,621           -        -
      Spartanburg, South Caroli-a            226,815      431,574           -        -

    Jack in the Box Restaurants:
      Sacramento, California   -             323,929      601,054           -        -
      Houston, Texas           -             315,842      590,708           -        -
      Arlington, Texas         -             404,752      592,173           -        -

    Long John Silver's Restaurants:
      Penn Hills, Pennsylvania -k)           292,370      356,444           -        -
      Arlington, Texas         -             362,939            -           -        -
      Johnstown, Pennsylvania  -             254,412            -           -        -
      Orlando, Florida         -             299,696      139,676           -        -
      Austin, Texas            -             463,937            -           -        -

    Steak -n- Shake Restaurant:
      Tampa, Florida           -             372,748            -           -        -

    Taco Cabana Restaurant:
      Houston, Texas (o)       -             512,861      405,095           -        -

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

                                          $12,668,461  $9,521,429   $2,196,627       -
                                          ===========  ===========  ==========  =======

Property of Joint Venture in
   Which the Partnership has
   a 50% Interest and has
   Invested in Under an
   Operating Lease:

    Hardee's Restaurant:
      Attalla, Alabama         -            $196,274     $434,428           -        -
                                          ===========  ===========  ==========  =======

Property in Which the Partnership
   has a 66.13% Interest as Tenants-
   In-Common and has Invested in
   Under an Operating Lease:

    Arby's Restaurant:
      Arvada, Colorado         -            $260,439     $545,126           -        -
                                          ===========  ===========  ==========  =======

Property of Joint Venture in
   Which the Partnership has a
   27.8% Interest and has Invested
   in Under an Operating Lease:

    Denny's Restaurant:
      Salem, Ohio              -            $131,762            -           -        -
                                          ===========  ===========  ==========  =======

Property in Which the Partnership
   has a 63.09% Interest as Tenants-
   In-Common and has Invested in
   Under an Operating Lease:

    Burger King Restaurant:
      Akron, Ohio (h)          -            $355,595     $517,030           -        -
                                          ===========  ===========  ==========  =======

Property in Which the Partnership
   has a 47.83% Interest as Tenants-
   in-Common and has Invested
   in Under an Operating Lease:

    Chevy's Fresh Mex Restaurant:
      Miami, Florida           -            $976,357     $974,016           -        -
                                          ===========  ===========  ==========  =======

Property in Which the Partnership
   has a 41.00% Interest as Tenants-
   in-Common and has Invested
   in Under an Operating Lease:

    Golden Corral Restaurant:
      Blue Springs, Missouri (l- (m)        $786,973   $1,297,431           -        -
                                          ===========  ===========  ==========  =======

Properties the Partnership has
   Invested in Under Direct
   Financing Leases

    Arby's Restaurant
      Philadelphia, Pennsylvani-                   -     $515,075           -        -
      Lee Summit, Missouri     -                   -      505,360           -        -

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

    Jack in the Box Restaurant:
      Cleburne, Texas          -             145,890      496,797           -        -

    Long John Silver's Restaurants:
      Arlington, Texas         -                   -      449,369           -        -
      Johnstown, Pennsylvania  -                   -            -     427,552        -
      Austin, Texas            -                   -      517,109           -        -

    Steak-n-Shake Restaurant:
      Tampa, Florida           -                   -            -     537,404        -
                                          -----------  -----------  ----------  -------


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

Property of Joint Venture in
   Which the Partnership has a
   27.8% Interest and has Invested
   in Under Direct Financing Lease:

    Denny's Restaurant:
      Salem, Ohio              -                   -     $371,836           -        -
                                          ===========  ===========  ==========  =======




                                                                        Life on Which
               Net Cost Basis at Which                                  Depreciation in
                 Carried at Close of Period (c)       Date              Latest Income
---------------------------------------------------
                    Buildings and        Accumulated of Con-  Date      Statement is
    Land       Improvements   Total      DepreciationstructionAcquired    Computed
-------------  ------------------------  -------------------------------------------






    $274,580           (f)    $274,580           -    1993    07/93         (d)
     445,638           (f)     445,638           -    1996    09/02         (d)


     256,901      669,537      926,438     210,338    1988    07/93         (b)
     247,183      723,304      970,487     227,230    1989    07/93         (b)
     174,843      618,815      793,658     194,404    1990    07/93         (b)


     445,389            -      445,389          (g)    -      03/94         (g)
     380,055            -      380,055          (g)    -      03/94         (g)
     280,409            -      280,409          (g)    -      03/94         (g)
     424,323            -      424,323          (g)    -      03/94         (g)
     501,416            -      501,416          (g)    -      03/94         (g)
     374,675            -      374,675          (g)    -      03/94         (g)
     386,638            -      386,638          (g)    -      10/94         (g)
     326,175            -      326,175          (g)    -      04/95         (g)


     460,107      552,207    1,012,314      47,740    1994    10/93         (i)
     530,494      540,983    1,071,477     155,798    1994    12/93         (b)



     611,589    1,071,838    1,683,427     343,869    1991    05/93         (b)
     625,527      964,122    1,589,649     308,079    1993    06/93         (b)
     617,016    1,103,437    1,720,453     323,549    1994    11/93         (b)


     197,336      417,418      614,754     131,134    1992    07/93         (b)
     160,149      424,977      585,126     133,509    1992    07/93         (b)
     164,004           (f)     164,004           -    1991    07/93         (d)
     218,639      460,364      679,003     144,626    1993    07/93         (b)
     204,516           (f)     204,516           -    1992    07/93         (d)
     240,363      412,621      652,984     129,627    1992    07/93         (b)
     226,815      431,574      658,389     135,581    1993    07/93         (b)


     323,929      601,054      924,983     190,471    1992    06/93         (b)
     315,842      590,708      906,550     185,628    1993    07/93         (b)
     404,752      592,173      996,925     186,034    1993    08/93         (b)


     292,370      356,444      648,814      48,430    1993    07/93         (k)
     362,939           (f)     362,939           -    1993    08/93         (d)
     254,412           (f)     254,412           -    1993    08/93         (d)
     299,696      139,676      439,372      42,566    1983    11/93         (b)
     463,937           (f)     463,937           -    1993    12/93         (d)


     372,748           (f)     372,748           -    1994    12/93         (d)


     512,861      405,095      917,956       7,877    1994    06/02         (b)



     290,195      641,709      931,904     191,326    1993    01/94         (b)
-------------  -----------  -----------  ----------

 $12,668,461   $11,718,056  $24,386,517  $3,337,816
=============  ===========  ===========  ==========








    $196,274     $434,428     $630,702    $131,042    1993    11/93         (b)
=============  ===========  ===========  ==========







    $260,439     $545,126     $805,565    $150,392    1994    09/94         (b)
=============  ===========  ===========  ==========







    $131,762           (f)    $131,762           -    1991    03/95         (d)
=============  ===========  ===========  ==========







    $355,595     $517,030     $872,625    $102,161    1970    01/97         (b)
=============  ===========  ===========  ==========







    $976,357     $974,016   $1,950,373    $162,432    1995    12/97         (b)
=============  ===========  ===========  ==========







    $786,973   $1,297,431   $2,084,404     $75,678    2000    04/01         (b)
=============  ===========  ===========  ==========






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


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


          (f)          (f)          (f)         (e)   1988    11/93         (e)


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


           -           (f)          (f)         (d)   1994    12/93         (d)
-------------


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







           -           (f)          (f)         (d)   1991    03/95         (d)
=============


</TABLE>



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

         NOTES TO SCHEDUE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 2002

(a)      Transactions in real estate and accumulated depreciation are summarized
         below.  The  balances  in 1999,  2000 and 2001  have been  adjusted  to
         reflect  the   reclassification   of   properties   accounted   for  as
         discontinued operations:

<TABLE>
<CAPTION>
                                                                                                   Accumulated
                                                                                 Cost              Depreciation
                                                                           ------------------   -------------------

 <c>

         Properties the Partnership has invested in Under Operating
              Leases:

             Balance, December 31, 1999                                        $  22,975,555         $   2,218,742
             Reclassified to net investment in direct financing lease               (504,839 )             (17,733 )
             Depreciation expense                                                         --               357,768
                                                                           ------------------   -------------------

             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
                                                                           ==================   ===================

         Property of Joint Venture in Which the Partnership has a 50%
              Interest and has Invested in Under an Operating Lease:

             Balance, December 31, 1999                                         $    630,702          $     87,599
             Depreciation expense                                                         --                14,481
                                                                           ------------------   -------------------

             Balance, December 31, 2000                                              630,702               102,080
             Depreciation expense                                                         --                14,481
                                                                           ------------------   -------------------

             Balance, December 31, 2001                                              630,702               116,561
             Depreciation expense                                                         --                14,481
                                                                           ------------------   -------------------

             Balance, December 31, 2002                                         $    630,702          $    131,042
                                                                           ==================   ===================

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

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

                                December 31, 2002

<TABLE>
<CAPTION>

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

 <c>

      Property in Which the Partnership has a 66.13% Interest as
         Tenants-in-Common and has Invested in Under an Operating
         Lease:

           Balance, December 31, 1999                                        $   805,565           $    95,882
           Depreciation expense                                                       --                18,170
                                                                         ----------------     -----------------

           Balance, December 31, 2000                                            805,565               114,052
           Depreciation expense                                                       --                18,170
                                                                         ----------------     -----------------

           Balance, December 31, 2001                                            805,565               132,222
           Depreciation expense                                                       --                18,170
                                                                         ----------------     -----------------

           Balance, December 31, 2002                                        $   805,565           $   150,392
                                                                         ================     =================

      Property of Joint Venture in Which the Partnership has a
         27.8% Interest and has Invested in Under a Direct
         Financing Lease:

           Balance, December 31, 1999                                        $   131,762              $     --
           Depreciation expense (d)                                                   --                    --
                                                                         ----------------     -----------------

           Balance, December 31, 2000                                            131,762                    --
           Depreciation expense (d)                                                   --                    --
                                                                         ----------------     -----------------

           Balance, December 31, 2001                                            131,762                    --
           Depreciation expense (d)                                                   --                    --
                                                                         ----------------     -----------------

           Balance, December 31, 2002                                        $   131,762              $     --
                                                                         ================     =================


</TABLE>
<page>

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

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

                                December 31, 2002

<TABLE>
<CAPTION>

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

 <c>

      Property in Which the Partnership has a 63.09% Interest as
         Tenants-In-Common and has Invested in Under an Operating
         Lease:

            Balance, December 31, 1999 (h)                                   $   872,625           $     50,456
            Depreciation expense                                                      --                 17,235
                                                                         ----------------     ------------------

            Balance, December 31, 2000 (h)                                       872,625                 67,691
            Depreciation expense                                                      --                 17,235
                                                                         ----------------     ------------------

            Balance, December 31, 2001 (h)                                       872,625                 84,926
            Depreciation expense                                                      --                 17,235
                                                                         ----------------     ------------------

            Balance, December 31, 2002 (h)                                   $   872,625           $    102,161
                                                                         ================     ==================


      Property in Which the Partnership has a 47.83% Interest as
         Tenants-In-Common has invested in Under an Operating
         Lease:

            Balance, December 31, 1999                                      $  1,950,373           $     65,022
            Depreciation expense                                                      --                 32,470
                                                                         ----------------     ------------------

            Balance, December 31, 2000                                         1,950,373                 97,492
            Depreciation expense                                                      --                 32,470
                                                                         ----------------     ------------------

            Balance, December 31, 2001                                         1,950,373                129,962
                                                                                      --                 32,470
                                                                         ----------------     ------------------

            Balance, December 31, 2002                                      $  1,950,373           $    162,432
                                                                         ================     ==================

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

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

                                December 31, 2002

<TABLE>
<CAPTION>

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

 <c>
      Property in Which the Partnership has a 41% Interest as
          Tenants-in-Common and has Invested in Under an
          Operating Lease:

            Balance, December 31, 2000                                          $     --              $      --
            Acquisition                                                        2,151,963                     --
            Depreciation expense                                                      --                 34,122
                                                                         ----------------     ------------------

            Balance, December 31, 2001                                         2,151,963                 34,122
            Reimbursement of construction costs (m)                              (67,559  )              (1,694  )
            Depreciation expense                                                      --                 43,250
                                                                         ----------------     ------------------

            Balance, December 31, 2002                                      $  2,084,404                 75,678
                                                                         ================     ==================
</TABLE>

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

(c)      As of December 31, 2002, the aggregate cost of the Properties  owned by
         the Partnership and joint ventures  (including the Properties  owned as
         tenants-in-common)  for federal income tax purposes was $31,225,186 and
         $6,852,267,  respectively.  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)      During  the year  ended  December  31,  1997,  the  Partnership  and an
         affiliate as  tenants-in-common,  purchased a real estate property from
         CNL BB Corp.,  an affiliate of the General  Partners,  for an aggregate
         cost of $872,625.

(i)      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.

(j)      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.

(k)      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 - CONTINUED

                                December 31, 2002



(l)      During  the year  ended  December  31,  2001,  the  Partnership  and an
         affiliate as  tenants-in-common  purchased a real estate  property from
         CNL BB Corp.,  an affiliate of the General  Partners,  for an aggregate
         cost of $2,151,963.

(m)      During the year ended  December  31,  2002,  the  Partnership  received
         reimbursements   from  the  developer  upon  final  construction  costs
         reconciliation.  In connection therewith,  the land and building values
         were adjusted accordingly.

(n)      During the year ended December 31, 2002, the Partnership purchased real
         estate from CNL  Franchise  Network,  LP, 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.

(o)      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.)

           99.1     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.)

           99.2     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 99.1
<page>

                                  EXHIBIT 99.2
<page>