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

                                    FORM 10-K

(Mark One)

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

                   For the fiscal year ended December 31, 2001

                                       OR

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

                        For the transition period from to


                         Commission file number 0-23968

                           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]

         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.  During  the  year  ended  December  31,  1996,  the
Partnership  sold its Property in Richmond,  Virginia,  consisting of land only,
and  reinvested the proceeds in a Burger King Property  located in Akron,  Ohio,
with an  affiliate of the General  Partners as  tenants-in-common,  in 1997.  In
addition,  during the year ended  December 31, 1997,  the  Partnership  sold its
Property in Orlando,  Florida,  to a third  party and  reinvested  the net sales
proceeds in a Chevy's  Fresh Mex  Property  located in Miami,  Florida,  with an
affiliate of the General  Partners as  tenants-in-common.  During the year ended
December 31, 1999, the Partnership sold its Jack in the Box Property in Houston,
Texas.  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.  As of December
31, 2001, 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  will hold its Properties  until the General  Partners
determine that the sale or other  disposition of the Properties is  advantageous
in view of the Partnership's investment objectives.  In deciding whether to sell
Properties, the General Partners will consider factors such as potential capital
appreciation,  net cash flow and  federal  income  tax  considerations.  Certain
lessees also have been granted options to purchase Properties,  generally at the
Property's  then fair market  value after a specified  portion of the lease term
has elapsed.  The  Partnership has no obligation to sell all or any portion of a
Property  at any  particular  time,  except as may be  required  under  property
purchase options granted to certain lessees.

         On March 11, 1999, the  Partnership  entered into an Agreement and Plan
of Merger with CNL American Properties Fund, Inc. ("APF"), pursuant to which the
Partnership  would be merged with and into a subsidiary  of APF (the  "Merger").
APF is a real estate investment trust whose primary business is the ownership of
restaurant properties leased on a long-term,  "triple-net" basis to operators of
national and regional restaurant chains. Under the Agreement and Plan of Merger,
APF was to issue shares of its common stock as consideration  for the Merger. On
March 1, 2000,  the General  Partners and APF  announced  that they had mutually
agreed to terminate the Agreement and Plan of Merger. The agreement to terminate
the  Agreement  and Plan of Merger  was based,  in large  part,  on the  General
Partners'  concern  that,  in light of market  conditions  relating  to publicly
traded  real  estate  investment  trusts,  the  value  of  the  transaction  had
diminished.  As a result of such diminishment,  the General Partners' ability to
unequivocally  recommend  voting for the  transaction,  in the exercise of their
fiduciary duties, had become  questionable.  The General Partners are continuing
to evaluate strategic  alternatives for the Partnership,  including alternatives
to provide liquidity to the Limited Partners.

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 18  years),  and expire
between 2003 and 2018. 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 $229,800. 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 36 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 also  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.

         In addition,  during 2001, the  Partnership  reinvested the majority of
the net sales  proceeds it received from the sale of the Property in Mount Airy,
North  Carolina  in a  Golden  Corral  located  in Blue  Springs,  Missouri,  as
tenants-in-common  with CNL Income Fund XV,  Ltd.,  an  affiliate of the General
Partners and a Florida Limited Partnership, as described below in "Joint Venture
and  Tenancy in Common  Arrangements."  The lease  terms for this  Property  are
substantially the same as the Partnership's other leases, as described above.

Major Tenants

         During 2001,  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  and  earned  income
(including the  Partnership's  share of rental and earned income from Properties
owned by joint  ventures and  Properties  owned with an affiliate of the General
Partners as  tenants-in-common).  As of December 31, 2001, 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 and earned  income in 2002.  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  and  earned  income  during  2001
(including the  Partnership's  share of rental and earned income from Properties
owned by joint  ventures and  Properties  owned with  affiliates  of the General
Partners as  tenants-in-common).  It is anticipated  that these four  Restaurant
chains  each  will  continue  to  account  for  more  than  ten  percent  of the
Partnership's  total  rental and earned  income under the terms of the leases in
2002. 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.



<PAGE>


Joint Venture and Tenancy in Common Arrangements

         The   Partnership   has  entered  into  two  separate   joint   venture
arrangements:  Attalla  Joint Venture and Salem Joint  Venture,  with CNL Income
Fund XIV,  Ltd.,  a limited  partnership  organized  pursuant to the laws of the
state of  Florida  and an  affiliate  of the  General  Partners,  for each joint
venture  to  purchase  and hold one  Property.  The joint  venture  arrangements
provide for the  Partnership and its joint venture partner to share in all costs
and  benefits  associated  with the joint  ventures  in  accordance  with  their
respective percentage interests in the joint ventures. The Partnership has a 50%
interest in Attalla Joint Venture and a 27.8%  interest in Salem Joint  Venture.
The  Partnership  and its joint  venture  partner are also jointly and severally
liable for all debts, obligations and other liabilities of the joint ventures.

         Attalla  Joint Venture and Salem Joint Venture have initial terms of 30
years  and,  after the  expiration  of the  initial  term,  each  joint  venture
continues  in  existence  from year to year unless  terminated  at the option of
either  of  the  joint  venturers  or by an  event  of  dissolution.  Events  of
dissolution  include the  bankruptcy,  insolvency  or  termination  of any joint
venturer,  sale of the Property owned by the joint venture and mutual  agreement
of the Partnership and its joint venture partners to dissolve the joint venture.

         The Partnership  shares management control equally with an affiliate of
the General  Partners for Attalla  Joint  Venture and Salem Joint  Venture.  The
joint venture agreements  restrict each venturer's ability to sell,  transfer or
assign its joint  venture  interest  without  first  offering it for sale to its
joint  venture  partner,  either upon such terms and  conditions as to which the
venturers  may agree or, in the event the venturers  cannot  agree,  on the same
terms and  conditions  as any offer from a third  party to  purchase  such joint
venture interest.

         Net cash flow from  operations of Attalla Joint Venture and Salem Joint
Venture is distributed 50 percent and 27.8%,  respectively,  to the  Partnership
and the balance is distributed to each other joint venture partner in accordance
with its percentage  interest in the joint venture.  Any  liquidation  proceeds,
after  paying  joint  venture  debts and  liabilities  and funding  reserves for
contingent liabilities,  will be distributed first to the joint venture partners
with positive capital account balances in proportion to such balances until such
balances  equal  zero,  and  thereafter  in  proportion  to each  joint  venture
partner's percentage interest in the joint venture.

         In addition  to the above joint  venture  agreements,  the  Partnership
entered into agreements to hold an Arby's Property, as  tenants-in-common,  with
CNL Income Fund II, Ltd.; a Burger King Property, as tenants-in-common, with CNL
Income Fund XVII, Ltd.; and a Chevy's Fresh Mex Property,  as tenants-in-common,
with CNL Income Fund III,  Ltd.,  CNL Income Fund VII, Ltd., and CNL Income Fund
X, Ltd. In addition, in April 2001, the Partnership entered into an agreement to
hold a Golden Corral Property,  as  tenants-in-common,  with CNL Income Fund XV,
Ltd. Each of the CNL Income Funds is an affiliate of the General Partners and is
a limited  partnership  organized  pursuant to the laws of the state of Florida.
The agreements  provide for the  Partnership  and the affiliates to share in the
profits  and  losses  of  the  Properties  in  proportion  to  each  co-tenant's
percentage  interest.  The  Partnership  owns a 66.13%,  63.09%,  47.83% and 41%
interest in these  Properties,  respectively.  The tenancy in common  agreements
restrict each party's ability to sell,  transfer,  or assign its interest in the
tenancy in common's Property without first offering it for sale to the remaining
parties.

         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 a
Property if the proceeds are reinvested in an additional Property.



<PAGE>


Certain Management Service

         CNL APF Partners,  LP, an affiliate of the General  Partners,  provides
certain  services  relating to management of the  Partnership and its Properties
pursuant to a management  agreement with the Partnership.  Under this agreement,
CNL APF  Partners,  LP (the  "Advisor") is  responsible  for  collecting  rental
payments,  inspecting  the  Properties  and  the  tenants'  books  and  records,
assisting the  Partnership  in  responding  to tenant  inquiries and notices and
providing  information to the Partnership about the status of the leases and the
Properties.  The Advisor also assists the General  Partners in  negotiating  the
leases.  For these  services,  the  Partnership has agreed to pay the Advisor an
annual fee 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  and the
Properties  held as  tenants-in-common  with an affiliate,  but not in excess of
competitive fees for comparable services.

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

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

Competition

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


Item 2.  Properties

         As of December 31, 2001, the Partnership owned 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 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.



<PAGE>


         The following table lists the Properties owned by the Partnership as of
December 31, 2001 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
                 Kansas                                       1
                 Louisiana                                    1
                 Maryland                                     1
                 Missouri                                     1
                 Ohio                                         4
                 Pennsylvania                                 3
                 South Carolina                               2
                 Tennessee                                    5
                 Texas                                        8
                                                          ------
                 TOTAL PROPERTIES                            46
                                                          ======

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

         As of December 31, 2001, the aggregate cost of the Properties  owned by
the  Partnership  and joint ventures  (including  the  Properties  owned through
tenancy in common  arrangements) for federal income tax purposes was $31,553,018
and $6,919,826, respectively.

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

               Restaurant Chain          Number of Properties
               ----------------          --------------------

                Arby's                                2
                Burger King                           5
                Checkers                              8
                Chevy's Fresh Mex                     1
                Denny's                               3
                Golden Corral                         4
                Hardee's                             11
                Jack in the Box                       4
                Lion's Choice                         1
                Long John Silver's                    5
                Steak-N-Shake                         1
                Wendy's                               1
                                                   -----
                TOTAL PROPERTIES                     46
                                                   =====


<PAGE>


         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.  Generally,  a
lessee is required, under the terms of its lease agreement, to make such capital
expenditures as may be reasonably  necessary to refurbish  buildings,  premises,
signs  and  equipment  so  as  to  comply  with  the  lessee's  obligations,  if
applicable,  under the  franchise  agreement  to reflect the current  commercial
image of its Restaurant  Chain.  These capital  expenditures  are required to be
paid by the lessee during the term of the lease.  The terms of the leases of the
Properties owned by the Partnership are described in Item 1. Business - Leases.

         At December 31, 2001,  2000,  1999, and 1997 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>

 <c>
                                      2001              2000             1999              1998              1997
                                 --------------    -------------    --------------    -------------     -------------

Rental Revenues (1)(2)              $ 3,768,826      $3,753,973        $3,727,854       $3,482,136        $3,822,053
Properties (2)                               46              46                46               47                47
Average Rent Per Property            $   81,931        $ 81,608          $ 81,040         $ 74,088          $ 81,320
</TABLE>

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

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

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

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

        2002                    --               $     --                   --
        2003                     2                 69,066                1.91%
        2004                    --                     --                   --
        2005                    --                     --                   --
        2006                    --                     --                   --
        2007                     1                 37,763                1.04%
        2008                     2                347,428                9.58%
        2009                     2                247,790                6.84%
        2010                     2                130,126                3.59%
        2011                     3                264,139                7.29%
        Thereafter              34              2,528,746               69.75%
                          ---------       ----------------    -----------------
        Total                   46              3,625,058              100.00%
                          =========       ================    =================


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

         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) and the
initial  term  of the  fifth  lease,  which  the  Partnership  assumed  from  an
unrelated,  third  party in  connection  with  the  acquisition  of the  related
Property,  is five years (expiring in 2005).  The General  Partners will seek to
re-lease  this  Property,  or to sell the Property  upon the  expiration  of the
lease.  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  $190,900  (ranging  from
approximately $168,600 to $229,800).


Item 3. Legal Proceedings

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


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

         Not applicable.


                                     PART II


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

(a) As of March 15, 2002, there were 3,049 holders of record of the Units. There
is no public  trading  market for the Units,  and it is not  anticipated  that a
public  market for the Units will  develop.  During 2001,  Limited  Partners who
wished to sell their Units may have  offered the Units for sale  pursuant to the
Partnership's  distribution reinvestment plan (the "Plan"), and Limited Partners
who wished to have their  distributions used to acquire additional Units (to the
extent Units were  available  for  purchase),  may have done so pursuant to such
Plan. The General Partners have the right to prohibit  transfers of Units.  From
inception  through  December 31, 2001,  the price paid for any Unit  transferred
pursuant to the Plan ranged from $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 2000 and 1999 other than
pursuant to the Plan.

<TABLE>
<CAPTION>

 <c>
                                                 2001(1)                                   2000(1)
                                  ---------------------------------------     -----------------------------------
                                     High            Low         Average        High         Low         Average
                                  ----------     ----------    ----------     --------    ---------    ----------
     First Quarter                   $ 7.08         $ 6.04        $ 6.65       $ 8.30        $8.30        $ 8.30
     Second Quarter                    7.01           6.57          6.76         7.06         7.06          7.06
     Third Quarter                     7.01           7.01          7.01         7.76         7.31          7.56
     Fourth Quarter                    7.45           6.39          6.97         7.00         5.75          6.80
</TABLE>

(1)      A total of 18,355 and 12,800 Units were transferred other than pursuant
         to  the  Plan  for  the  years  ended   December  31,  2001  and  2000,
         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, 2001 and 2000, 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 2001 and 2000 to the Limited  Partners.  These amounts  include
monthly  distributions  made in arrears  for the  Limited  Partners  electing to
receive such distributions on this basis. No amounts  distributed to the Limited
Partners  for the years ended  December  31, 2001 and 2000 are required to be or
have been  treated by the  Partnership  as a return of capital  for  purposes of
calculating   the   Limited   Partners'   return  on  their   adjusted   capital
contributions. No distributions have been made to the General Partners to date.

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

(b)      Not applicable.


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

 <c>
                                       2001               2000              1999              1998               1997
                                   --------------    ---------------   ---------------    --------------     --------------
Year ended December 31:
   Revenues (1)                       $3,737,845        $ 3,818,095        $3,719,734        $3,789,615         $3,832,470
   Net income (2)                      2,835,821          3,089,297         2,681,165         2,495,855          3,035,627
   Cash distributions declared
                                       3,400,008          3,400,008         3,400,008         3,400,008          3,400,008
   Net income per Unit (2)                  0.71               0.77              0.66              0.62               0.75
   Cash distributions
      declared per Unit                     0.85               0.85              0.85              0.85               0.85

At December 31:
   Total assets                      $33,149,433        $33,848,645       $34,337,261       $34,687,493        $35,523,590
   Partners' capital                  32,155,662         32,719,849        33,030,560        33,749,403         34,653,556
</TABLE>


(1)      Revenues include equity in earnings of joint ventures.

(2)      Net income 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. Net income 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.  Net income for the year ended December 31, 1997, includes
         a loss on sale of assets of $48,538.

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



<PAGE>


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.  As of December 31, 2001, the  Partnership  owned 46 Properties,
either directly or through joint venture or tenancy in common arrangements.

Capital Resources

         The  Partnership's  primary  source of capital is cash from  operations
(which  includes cash received from tenants,  distributions  from joint ventures
and interest  received,  less cash paid for expenses).  Cash from operations was
$3,302,832,  $3,360,034 and  $3,312,989,  for the years ended December 31, 2001,
2000, and 1999, respectively.  The decrease in cash from operations during 2001,
as compared to 2000,  and the  increase  during 2000,  as compared to 1999,  was
primarily a result of changes in income and expenses as described in "Results of
Operations" below and changes in the Partnership's working capital.

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

         In November  1998,  the  Partnership  entered  into a new lease for the
Property  in Tampa,  Florida,  with a new tenant to operate  the  Property  as a
Steak-n-Shake  restaurant.  In  connection  with the new  lease  agreement,  the
Partnership  agreed to renovate the Property;  therefore,  during the year ended
1999, the old building  located on the Property was removed.  During 1999, a new
building was constructed and was operational.  In connection with the new lease,
the Partnership funded approximately  $537,400 in construction costs for the new
building. The Partnership used a portion of the net sales proceeds from the 1999
sale of the Property in Houston, Texas, to pay such costs, as described below.

         In May 1999, the Partnership  entered into a new lease for the Property
in Philadelphia,  Pennsylvania with 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 sale of the Property in Houston,  Texas,  to
pay such costs, as described below.

         In July 1999, the Partnership sold its Property in Houston,  Texas to a
third party for  $1,073,887  and  received  net sales  proceeds  of  $1,059,498,
resulting in a gain of $176,159.  The  Partnership  used the majority of the net
sales proceeds to pay for the  construction and renovation costs described above
and  to  pay  Partnership  liabilities.   The  Partnership  distributed  amounts
sufficient to enable the Limited Partners to pay federal and state income taxes,
if any (at a level reasonably assumed by the General  Partners),  resulting from
the sale.

         In April 2001, the Partnership  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,  including closing costs. As of December 31, 2001, the Partnership
owned a 41 percent interest in the profits and losses of the Property.

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

         Currently, rental income from the Partnership Properties is invested in
money market  accounts or other  short-term  highly liquid  investments  such as
demand  deposit  accounts  at  commercial  banks,   money  market  accounts  and
certificates  of deposit  with less than a 90-day  maturity  date,  pending  the
Partnership's  use  of  such  funds  to  pay  Partnership  expenses  or to  make
distributions  to partners.  At December 31, 2001, the  Partnership had $785,750
invested in such short-term  investments as compared to $818,231 at December 31,
2000.  As of December 31, 2001,  the average  interest rate earned on the rental
income   deposited  in  demand   deposit   accounts  at  commercial   banks  was
approximately  3.0% annually.  The funds remaining at December 31, 2001, will be
used towards the payment of distributions and other liabilities.

Short-Term Liquidity

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

         The Partnership's  investment strategy of acquiring Properties for cash
and 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
cash flow in excess of operating expenses.

         Due to low  operating  expenses  and  ongoing  cash flow,  the  General
Partners believe that the Partnership has sufficient working capital reserves at
this time. In addition,  because all 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 General  Partners have the right,  but not the obligation,  to make
additional capital  contributions if they deem it appropriate in connection with
the operations of the Partnership.

         The Partnership  generally  distributes cash from operations  remaining
after the payment of the operating  expenses of the  Partnership,  to the extent
that  the  General  Partners   determine  that  such  funds  are  available  for
distribution.  Based on current and 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, 2001,  2000,  and 1999.  This  represents
distributions  of $0.85 per Unit for each of the years ended  December 31, 2001,
2000, and 1999. No  distributions  were made to the General  partners during the
years ended  December 31, 2001,  2000 and 1999.  No amounts  distributed  to the
Limited  Partners for the years ended  December 31, 2001,  2000,  and 1999,  are
required to be or have been  treated by the  Partnership  as a return of capital
for  purposes of  calculating  the Limited  Partners'  return on their  adjusted
capital contributions. The Partnership intends to continue to make distributions
of cash available for distribution to 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 year ended December 31, 2001 and 2000.

         As of December  31, 2001 and 2000,  the  Partnership  owed  $15,534 and
$132,671,  respectively,  to related  parties for such amounts as accounting and
administrative  services  and  management  fees.  As  of  March  15,  2002,  the
Partnership   had  reimbursed   the  affiliates  all  of  such  amounts.   Other
liabilities,  including distributions payable, increased to $978,237 at December
31, 2001, from $996,125 at December 31, 2000. The decrease in other  liabilities
is primarily  attributable to the Partnership paying transaction costs that were
accrued at  December  31,  2000  relating  to the  proposed  merger with APF, as
described in "Termination of Merger." Total liabilities at December 31, 2001, to
the extent they exceed cash and cash equivalents,  will be paid from anticipated
future cash from operations.

Long-Term Liquidity

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

Critical Accounting Policies

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

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

         Management  reviews its  Properties and  investments in  unconsolidated
entities  periodically  (no less than once per  year)  for  impairment  whenever
events or changes in  circumstances  indicate  that the  carrying  amount of the
assets may not be recoverable through operations.  Management determines whether
impairment in value has occurred by comparing the estimated future  undiscounted
cash flows, including the residual value of the Property, with the carrying cost
of the  individual  Property.  If an  impairment  is  indicated,  the assets are
adjusted to their fair value.

Results of Operations

         During  1999,  the  Partnership   owned  and  leased  42  wholly  owned
Properties  (including  one Property in Houston,  Texas,  which was sold in July
1999),  and during  2000 and 2001,  the  Partnership  owned and leased 41 wholly
owned Properties  (including one Property in Mount Airy,  North Carolina,  which
was sold in April 2001.) During 2001,  2000,  and 1999,  the  Partnership  was a
co-venturer  in two  separate  joint  ventures  that each  owned and  leased one
Property. During 2001, 2000, and 1999, the Partnership acquired and leased three
Properties with affiliates of the General Partners as tenants-in-common.  During
2001,  the  Partnership  acquired  and leased one  additional  Property  with an
affiliate  of the General  Partners,  as  tenants-in-common.  As of December 31,
2001,  the  Partnership  owned,  either  directly,  as  tenants-in-common   with
affiliates  or through  joint  venture  arrangements,  46  Properties  which are
generally subject to long-term,  triple-net leases. The leases of the Properties
provide for minimum base annual rental amounts (payable in monthly installments)
ranging from approximately $30,600 to $229,800. 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.  For
further  description of the  Partnership's  leases and  Properties,  see Item 1.
Business - Leases and Item 2. Properties, respectively.

         During  the  years  ended  December  31,  2001,  2000,  and  1999,  the
Partnership  earned $3,157,455,  $3,238,178,  and $3,162,395,  respectively,  in
rental  income from  operating  leases and earned  income from direct  financing
leases  from its wholly  owned  Properties.  The  decrease  in rental and earned
income  during the year ended  December 31, 2001,  as compared to the year ended
December 31, 2000, was primarily due to the fact that the  Partnership  sold its
Property in Mount Airy,  North  Carolina in April 2001, as described in "Capital
Resources."  Rental and earned income 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 the sale of the Property in Mount Airy, North Carolina, in a Property in Blue
Springs,   Missouri   with   an   affiliate   of  the   General   Partners,   as
tenants-in-common,  as described in "Capital  Resources." The increase in rental
and earned income during 2000 and 1999,  each as compared to the previous  year,
was  partially  offset by a reduction in rental and earned income as a result of
the sale of the  Property  in Houston,  Texas,  as  described  above in "Capital
Resources."

         The increase in rental  income  during 2000,  as compared to 1999,  was
partially  attributable  to an  increase  in  rental  income  as a result of the
Partnership  re-leasing  several  Properties  affected by the bankruptcy of Long
John  Silvers,  Inc.  that  occurred  during  1998.  In August  1999,  Long John
Silver's,  Inc.  assumed  and  affirmed  its  five  remaining  leases,  and  the
Partnership  has  continued  receiving  rental  payments  relating to these five
leases.

         For the years ended December 31, 2001,  2000, and 1999, the Partnership
also earned $245,820, $277,246, and $273,136, respectively, in contingent rental
income.  The decrease in contingent rental income during the year ended December
31,  2001,  as compared  to the year ended  December  31,  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,  for the years ended December 31, 2001, 2000 and 1999, the
Partnership earned $309,381, $244,344 and $242,158,  respectively,  attributable
to net income earned by  unconsolidated  joint ventures in which the Partnership
is a  co-venturer.  The increase in net income  earned by  unconsolidated  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, as described  above in "Capital  Resources." The
increase in net income earned by joint ventures,  during the year ended December
31, 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 47.83%  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 year ended  December  31, 2001,  three of the  Partnership's
lessees, Flagstar Enterprises, Inc., Long John Silver's, Inc., and Golden Corral
Corporation,  each contributed more than ten percent of the Partnership's  total
rental and earned income (including the Partnership's share of rental and earned
income  from  Properties  owned by joint  ventures  and  Properties  owned  with
affiliates  of the General  Partners as  tenants-in-common).  As of December 31,
2001,  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, each of the lessees will continue to contribute
more than ten percent of the Partnership's total rental and earned income during
2002.  In addition,  during the year ended  December 31, 2001,  four  Restaurant
Chains,  Long John  Silver's,  Hardee's,  Golden Corral,  and Burger King,  each
accounted for more than 10% of the Partnership's  total rental and earned income
(including the  Partnership's  share of rental and earned income from Properties
owned by joint  ventures and  Properties  owned with  affiliates  of the General
Partners as  tenants-in-common).  It is anticipated  that these four  Restaurant
chains each will  continue to account for more than 10% of the total  rental and
earned  income  under the  terms of its  leases in 2002.  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,  2001,   2000  and  1999,  the
Partnership also earned $25,189, $58,327 and $42,045,  respectively, in interest
and other income. Interest and other income were higher during 2000, as compared
to 2001 and 1999, due to interest earned on the net sales proceeds received from
the 1999  sale of a  Property,  as  described  above,  pending  reinvestment  in
construction and renovation costs relating to two Properties, as described above
in "Capital Resources."

         Operating expenses,  including  depreciation and amortization  expense,
and provisions for  write-down of assets were $902,024,  $728,798,  and $862,443
for the years  ended  December  31,  2001,  2000,  and 1999,  respectively.  The
increase in operating  expenses  during the year ended  December  31,  2001,  as
compared to the year ended December 31, 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.

         The increase in operating  expenses  during the year ended December 31,
2001, as compared to the year ended  December 31, 2000, was partially due to the
Partnership  incurring additional state taxes due to changes in tax requirements
in several states in which the Partnership conducts business.  In addition,  the
increase in operating  expenses  during the year ended  December  31,  2001,  as
compared to the year ended December 31, 2000, was partially due to the fact that
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 land and buildings on operating  leases.  In accordance with Statement
of  Financial   Accounting  Standards  No.  13,  "Accounting  for  Leases,"  the
Partnership  recorded  the  reclassified  asset at the lower of  original  cost,
present fair value, or present carrying amount. 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 in  previously  accrued  rental  income  relating  to two
Denny's  Properties due to financial  difficulties the tenant  experienced.  The
accrued  rental  income  was  the  accumulated  amount  of  non-cash  accounting
adjustments  previously  recorded in order to recognize  future  scheduled  rent
increases as income evenly over the term of the lease. The provision  represents
the  difference  between  the  carrying  value of the  Property,  including  the
accumulated accrued rental income at December 31, 2001 and the General Partners'
current estimate of net realizable value for this Property.

         The decrease in operating  expenses  during 2000,  as compared to 1999,
was partially due to the amount of transaction  costs the  Partnership  incurred
related to the General Partners retaining financial and legal advisors to assist
them in evaluating and negotiating the proposed and terminated  merger with APF,
as described below in "Termination of Merger." No such expenses were incurred in
2001.

         The decrease in operating  expenses  during 2000,  as compared to 1999,
was also partially  attributable  to the fact that during 2000, the  Partnership
received  reimbursement  from Long John  Silver's,  Inc. for amounts  previously
incurred by the Partnership as expenses. In addition,  the decrease during 2000,
as compared to 1999, was partially  attributable  to, a decrease in depreciation
expense due to the 1999 sale of the  Property in Houston,  Texas,  as  described
above.

         During 1999, the Partnership  entered into a new lease for its Property
in Tampa,  Florida,  with a Steak-n-Shake  operator.  In connection with the new
lease,  the  Partnership  agreed to renovate the  Property;  therefore,  the old
building  located on the  Property  was removed.  As a result,  the  Partnership
removed the  remaining  undepreciated  cost of the  building  from its  accounts
resulting in a loss of $352,285 during the year ended December 31, 1999.

         In addition,  during  1999,  as a result of the sale of the Property in
Houston,   Texas,  described  above  in  "Capital  Resources,"  the  Partnership
recognized a gain of $176,159. No properties were sold during 2000.

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

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

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

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

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

Termination of Merger

         On March 11, 1999, the  Partnership  entered into an Agreement and Plan
of Merger with APF,  pursuant to which the Partnership  would be merged with and
into a subsidiary of APF.  Under the  Agreement  and Plan of Merger,  APF was to
issue shares of its common stock as  consideration  for the Merger.  On March 1,
2000, the General  Partners and APF announced  that they had mutually  agreed to
terminate  the  Agreement  and Plan of Merger.  The  agreement to terminate  the
Agreement and Plan of Merger was based, in large part, on the General  Partners'
concern that,  in light of market  conditions  relating to publicly  traded real
estate  investment  trusts,  the value of the transaction  had diminished.  As a
result of such  diminishment,  the General  Partners'  ability to  unequivocally
recommend voting for the transaction, in the exercise of their fiduciary duties,
had become questionable.


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            16
        Financial Statements:
           Balance Sheets                                             17
           Statements of Income                                       18
           Statements of Partners' Capital                            19
           Statements of Cash Flows                                20-21
           Notes to Financial Statements                           22-37



<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,  2001 and 2000,  and the results of its
operations  and its cash flows for each of the three  years in the period  ended
December 31, 2001 in conformity with accounting principles generally accepted in
the United  States of  America.  In  addition,  in our  opinion,  the  financial
statement  schedule listed in the index  appearing  under item 14(a)(2)  present
fairly, in all material respects, the information set forth therein when read in
conjunction with the related financial  statements.  These financial  statements
and financial  statement  schedule are the  responsibility  of the Partnership's
management;  our  responsibility  is to express  an  opinion on these  financial
statements and financial  statement  schedules based on our audits. We conducted
our audits of these statements in accordance with auditing  standards  generally
accepted in the United States of America, which require that we plan and perform
the audit to obtain reasonable  assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence  supporting the amounts and  disclosures  in the financial  statements,
assessing the  accounting  principles  used and  significant  estimates  made by
management,  and evaluating the overall  financial  statement  presentation.  We
believe that our audits provide a reasonable basis for our opinion.




/s/ PricewaterhouseCoopers LLP

Orlando, Florida
February 8, 2002

<PAGE>




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

                                 BALANCE SHEETS

<TABLE>
<CAPTION>

 <c>
                                                                           December 31,
                                                                2001                        2000
                                                       -----------------------      ----------------------

                                   ASSETS

Land and buildings on operating leases, net                    $   21,299,059               $  21,157,116
Net investment in direct financing leases                           5,784,718                   7,449,706
Investment in joint ventures                                        3,318,655                   2,434,759
Cash and cash equivalents                                             785,750                     818,231
Receivables, less allowance for doubtful accounts
     of $5,674 in 2000                                                 46,553                     243,086
Accrued rental income                                               1,866,515                   1,682,363
Other assets                                                           48,183                      63,384
                                                       -----------------------      ----------------------

                                                               $   33,149,433               $  33,848,645
                                                       =======================      ======================


         LIABILITIES AND PARTNERS' CAPITAL

Accounts payable and accrued expenses                            $      5,945                $     38,373
Escrowed real estate taxes payable                                      5,372                          --
Distributions payable                                                 850,002                     850,002
Due to related parties                                                 15,534                     132,671
Rents paid in advance and deposits                                     91,470                      80,653
Deferred rental income                                                 25,448                      27,097
                                                       -----------------------      ----------------------
        Total liabilities                                             993,771                   1,128,796

Partners' capital                                                  32,155,662                  32,719,849
                                                       -----------------------      ----------------------

                                                               $   33,149,433               $  33,848,645
                                                       =======================      ======================
</TABLE>


                See accompanying notes to financial statements.

<PAGE>


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

                              STATEMENTS OF INCOME

<TABLE>
<CAPTION>

 <c>
                                                                                      Year Ended December 31,
                                                                             2001              2000             1999
                                                                        ----------------  ----------------  --------------
   Revenues
       Rental income from operating leases                                 $  2,469,628       $ 2,401,921     $ 2,367,931
       Earned income from direct financing leases                               687,827           836,257         794,464
       Contingent rental income                                                 245,820           277,246         273,136
       Interest and other income                                                 25,189            58,327          42,045
                                                                        ----------------  ----------------  --------------
                                                                              3,428,464         3,573,751       3,477,576
                                                                        ----------------  ----------------  --------------
   Expenses:
       General operating and administrative                                     277,453           165,389         152,089
       Professional services                                                     61,865            33,202          51,773
       Management fees to related parties                                        36,671            36,142          36,152
       Real estate taxes                                                             --                --           7,877
       State and other taxes                                                     57,457            21,731          23,362
       Depreciation and amortization                                            412,072           385,470         399,174
       Provision for write-down of assets                                        56,506            51,618              --
       Transaction costs                                                             --            35,246         192,016
                                                                        ----------------  ----------------  --------------
                                                                                902,024           728,798         862,443
                                                                        ----------------  ----------------  --------------

   Income Before Gain on Sale of Assets, Loss on Removal of
       Building and Equity in Earnings of Joint Ventures                      2,526,440         2,844,953       2,615,133

   Gain on Sale of Assets                                                            --                --         176,159

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

   Equity in Earnings of Joint Ventures                                         309,381           244,344         242,158
                                                                        ----------------  ----------------  --------------

   Net Income                                                              $  2,835,821       $ 3,089,297     $ 2,681,165
                                                                        ================  ================  ==============

   Allocation of Net Income:
       General partners                                                        $     --           $    --       $  28,060
       Limited partners                                                       2,835,821         3,089,297       2,653,105
                                                                        ----------------  ----------------  --------------
                                                                           $  2,835,821       $ 3,089,297     $ 2,681,165
                                                                        ================  ================  ==============

   Net Income Per Limited Partner Unit                                       $     0.71         $    0.77       $    0.66
                                                                        ================  ================  ==============

   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, 2001, 2000 and 1999

<TABLE>
<CAPTION>

 <c>
                                   General Partners                                     Limited Partners
                              ---------------------------- --------------------------------------------- ------------- ------------
                                              Accumulated                                   Accumulated    Syndication
                              Contributions     Earnings    Contributions   Distributions    Earnings         Costs         Total
                              --------------  ------------ --------------- --------------- -------------- ------------ ------------

Balance, December 31, 1998      $     1,000   $    162,874  $  40,000,000   $ (17,728,408) $  15,979,106 $ (4,665,169) $ 33,749,403

    Distributions to limited
       partners ($0.85 per
       limited partner unit)             --             --             --      (3,400,008)            --           --    (3,400,008)
    Net income                           --         28,060             --              --      2,653,105           --     2,681,165
                              --------------  ------------ --------------- --------------- --------------- ----------- ------------

Balance, December 31, 1999            1,000        190,934     40,000,000     (21,128,416)    18,632,211   (4,665,169)   33,030,560

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

Balance, December 31, 2000            1,000        190,934     40,000,000     (24,528,424)    21,721,508   (4,665,169)   32,719,849

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

Balance, December 31, 2001      $     1,000   $    190,934  $  40,000,000   $ (27,928,432) $  24,557,329 $ (4,665,169) $ 32,155,662
                              ==============  ============ =============== =============== =============== =========== ============

</TABLE>

                See accompanying notes to financial statements.

<PAGE>



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

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

 <c>
                                                                         Year Ended December 31,
                                                             2001                  2000                  1999
                                                       ------------------    ------------------   --------------------

 Increase ( Decrease) in Cash and Cash Equivalents:

 Cash Flows from Operating Activities:
     Cash received from tenants                              $ 3,545,145           $ 3,404,302            $ 3,342,666
     Distributions from joint ventures                           307,790               254,957                247,710
     Cash paid for expenses                                     (568,238)             (329,070)              (314,517)
     Interest received                                            18,135                29,845                 37,130
                                                       ------------------    ------------------   --------------------
          Net cash provided by operating
               activities                                      3,302,832             3,360,034              3,312,989
                                                       ------------------    ------------------   --------------------

 Cash Flows from Investing Activities:
     Proceeds from sale of assets                                947,000                    --              1,059,498
     Additions to land and buildings                                  --               (87,597)              (238,257)
     Investment in direct financing leases                            --                    --               (537,404)
     Investment in joint ventures                               (882,305)                   --                     --
     Payment of lease costs                                           --                    --                (17,875)
                                                       ------------------    ------------------   --------------------
         Net cash provided by (used in)
               investing activities                               64,695               (87,597)               265,962
                                                       ------------------    ------------------   --------------------

 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            (32,481)             (127,571)               178,943

 Cash and Cash Equivalents at Beginning of Year
                                                                 818,231               945,802                766,859
                                                       ------------------    ------------------   --------------------

 Cash and Cash Equivalents at End of Year                     $  785,750            $  818,231             $  945,802
                                                       ==================    ==================   ====================
</TABLE>

                See accompanying notes to financial statements.


<PAGE>


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

                       STATEMENT OF CASH FLOWS - CONTINUED


<TABLE>
<CAPTION>

 <c>
                                                                                Year Ended December 31,
                                                                  2001                 2000                 1999
                                                            -----------------    -----------------    -----------------

      Reconciliation of Net Income to Net Cash
          Provided by Operating Activities

             Net income                                         $  2,835,821         $  3,089,297         $  2,681,165
                                                            -----------------    -----------------    -----------------
             Adjustments to reconcile net income to net
                cash provided by operating activities:
                    Depreciation                                     410,264              383,489              397,150
                    Amortization                                       1,808                1,981                2,024
                    Equity in earnings of joint
                      ventures, net of distributions                  (1,591 )             10,613                5,552
                    Loss on removal of building in
                      connection with renovation                          --                   --              352,285
                    Gain on sale of assets                                --                   --             (176,159 )
                    Provision for write-down of assets                56,506               51,618                   --
                    Decrease (increase) in receivables               196,533             (107,654 )            (10,493 )
                    Decrease in net investment in
                      direct financing leases                        109,275              107,487               90,732
                    Increase in accrued rental income               (184,152 )           (178,371 )           (195,625 )
                    Decrease (increase) in
                      other assets                                    13,393              (15,264 )             (7,510 )
                    Increase (decrease) in
                      accounts payable, accrued
                      expenses, and escrowed real
                      estate taxes payable                           (27,056 )           (108,030 )            135,412
                    Increase (decrease) in due to
                      related parties                               (117,137 )             63,437               46,705
                    Increase (decrease) in rents paid
                      in advance and deposits                          9,168               61,431               (8,249 )
                                                            -----------------    -----------------    -----------------
                         Total adjustments                           467,011              270,737              631,824
                                                            -----------------    -----------------    -----------------

      Net Cash Provided by Operating
           Activities                                           $  3,302,832         $  3,360,034         $  3,312,989
                                                            =================    =================    =================

      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, 2001, 2000 and 1999


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
         acquisition of land and buildings at cost,  including  acquisition  and
         closing costs. Land and buildings are leased to unrelated third parties
         generally on a triple-net basis,  whereby the tenant is responsible for
         all operating  expenses  relating to the property,  including  property
         taxes, insurance, maintenance and repairs. The leases are accounted for
         using  either the  direct  financing  or the  operating  methods.  Such
         methods are described below:

                  Direct  financing  method - The leases accounted for using the
                  direct  financing  method are recorded at their net investment
                  (which at the inception of the lease generally  represents the
                  cost of the asset) (see Note 4).  Unearned  income is deferred
                  and  amortized to income over the lease terms so as to produce
                  a constant  periodical rate of return on the Partnership's net
                  investment in the leases.

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


<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2001, 2000, and 1999


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

                  Accrued  rental  income  represents  the  aggregate  amount of
                  income  recognized  on a  straight-line  basis  in  excess  of
                  scheduled  rental  payments  to date.  In  contrast,  deferred
                  rental income  represents  the  aggregate  amount of scheduled
                  rental payments to date (including  rental payments due during
                  construction  and  prior  to  the  property  being  placed  in
                  service)  in excess of income  recognized  on a  straight-line
                  basis over the lease term  commencing on the date the property
                  is placed in  service.  Whenever a tenant  defaults  under the
                  terms of its  lease,  or events  or  changes  in  circumstance
                  indicate  that the tenant will not lease the property  through
                  the end of the lease term, the Partnership  either reserves or
                  reverses the cumulative accrued rental income balance.

         When  the  properties  are  sold,  the  related  cost  and  accumulated
         depreciation  for operating  leases and the net  investment  for direct
         financing leases,  plus any accrued rental income, 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 fair value.  Although the general  partners have made
         their best estimate of these factors based on current conditions, it is
         reasonably  possible  that  changes  could occur in the near term which
         could adversely affect the general  partners' best estimate of net cash
         flows  expected to be generated  from its  properties  and the need for
         asset impairment write downs.

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



<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2001, 2000, and 1999


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

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

         Cash and Cash Equivalents - The Partnership considers all highly liquid
         investments  with a maturity of three months or less when  purchased to
         be cash  equivalents.  Cash  and cash  equivalents  consist  of  demand
         deposits at commercial  banks 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  new  leases,  which 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 are netted  against
         partners' capital and represent a reduction of Partnership equity and a
         reduction in the basis of each partner's investment. See "Income Taxes"
         footnote for a  reconciliation  of net income for  financial  reporting
         purposes to net income for federal income tax purposes.



<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2001, 2000, and 1999


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

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

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

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

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

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


<PAGE>



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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2001, 2000, and 1999


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

         recognized,  the adjusted  carrying amount of a long-lived asset is its
         new cost basis.  The adoption of FAS 144 did not have any effect on the
         partnership's recording of impairment losses as this Statement retained
         the  fundamental   provisions  of  FAS  No.  121  "Accounting  for  the
         Impairment  of  Long-Lived  Assets  and  for  Long-Lived  Assets  to be
         Disposed of".

1.       Leases:
         ------

         The  Partnership  leases its land or land and buildings to operators of
         national and  regional  fast-food  and  family-style  restaurants.  The
         leases are accounted for under the provisions of Statement of Financial
         Accounting  Standards  No. 13,  "Accounting  for  Leases."  Some of the
         leases are  classified as operating  leases and some of the leases have
         been classified as direct financing  leases.  For the leases classified
         as direct  financing  leases,  the  building  portions of the  property
         leases are  accounted  for as direct  financing  leases  while the land
         portions  of  the  majority  of  these  leases  are  operating  leases.
         Substantially all leases are for 15 to 20 years and provide for minimum
         and contingent rentals. In addition, the tenant pays all property taxes
         and  assessments,  fully  maintains  the  interior  and exterior of the
         building and carries insurance coverage for public liability,  property
         damage,  fire and extended coverage.  The lease options generally allow
         tenants  to  renew  the  leases  for two to five  successive  five-year
         periods  subject to the same terms and conditions as the initial lease.
         Most  leases  also allow the tenant to  purchase  the  property at fair
         market value after a specified portion of the lease has elapsed.

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

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


<TABLE>
<CAPTION>

 <c>
                                                     2001                   2000
                                              --------------------   --------------------

Land                                                 $ 12,374,488           $ 12,374,488
Buildings                                              12,084,577             11,532,370
                                              --------------------   --------------------
                                                       24,459,065             23,906,858
Less accumulated depreciation                          (3,160,006)            (2,749,742)
                                              --------------------   --------------------

                                                     $ 21,299,059           $ 21,157,116
                                              ====================   ====================
</TABLE>



<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2001, 2000, and 1999


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

         In May 1999, the Partnership  entered into a new lease for the property
         in  Philadelphia,  Pennsylvania,  with  a new  tenant  to  operate  the
         property  as  an  Arby's  restaurant.   In  connection  therewith,  the
         Partnership  funded a total of  approximately  $325,900  in  renovation
         costs, of which approximately $87,600 and $238,300 were incurred during
         2000 and 1999,  respectively.  The portion of the lease relating to the
         building  portion of the property is classified  as a direct  financing
         lease (see Note 4).

         During 2000,  the  Partnership  recorded a provision for  write-down of
         assets of $51,618 in previously  accrued rental income  relating to the
         properties  in Peoria and Mesa,  Arizona due to financial  difficulties
         the tenant  experienced.  The accrued rental income was the accumulated
         amount of non-cash accounting  adjustments previously recorded in order
         to recognize  future scheduled rent increases as income evenly over the
         term of the lease. The provision represented the difference between the
         carrying  value of the  property,  including  the  accumulated  accrued
         rental income, and the general partners' estimated net realizable value
         for the property.

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



               2002                                           $  2,293,808
               2003                                              2,350,309
               2004                                              2,448,907
               2005                                              2,464,839
               2006                                              2,490,369
               Thereafter                                       14,910,987
                                                         ------------------

                                                              $ 26,959,219
                                                         ==================

         Since  lease  renewal  periods  are  exercisable  at the  option of the
         tenant, the above table only presents future minimum lease payments due
         during  the  initial  lease  terms.  In  addition,  this table does not
         include any amounts for future contingent rentals which may be received
         on the leases based on a percentage of the tenant's gross sales.


<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2001, 2000, and 1999


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

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

<TABLE>
<CAPTION>

 <c>
                                                                 2001                      2000
                                                         ---------------------     ----------------------

                    Minimum lease payments receivable
                                                                $  10,242,278              $  13,545,749
                    Estimated residual values                       1,982,699                  2,555,822
                    Less unearned income                           (6,440,259)                (8,651,865)
                                                         ---------------------     ----------------------

                    Net investment in direct financing
                        leases                                  $   5,784,718              $   7,449,706
                                                         =====================     ======================
</TABLE>

         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 land and building on operating  leases. In accordance with the
         Statement of Financial  Accounting  Standards No. 13.,  "Accounting for
         Leases," the Partnership  recorded the reclassified  lease at the lower
         of original cost,  present fair value,  or present  carrying  amount No
         loss  on  the  reclassification  of  the  direct  financing  lease  was
         recorded.



<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2001, 2000, and 1999


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

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

               2002                                  $ 774,241
               2003                                    774,783
               2004                                    780,746
               2005                                    780,746
               2006                                    789,457
               Thereafter                            6,342,305
                                               ----------------

                                                   $10,242,278
                                               ================

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

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

         The  Partnership  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;
         and Miami,  Florida;  each as tenants-in-common  with affiliates of the
         general  partners.  As of December 31, 2001,  the  Partnership  owned a
         66.13%, 63.09% and 47.83% interest, respectively, in the properties.

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



<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2001, 2000, and 1999


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

         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.,  a
         Florida limited partnership,  and an affiliate of the general partners.
         The  Partnership  and CNL Income Fund XV,  Ltd.,  a  tenants-in-common,
         acquired this  interest from CNL BB Corp.,  an affiliate of the general
         partners  (see Note 8). 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, 2001, 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 December 31:

<TABLE>
<CAPTION>

 <c>
                                                                            2001                   2000
                                                                     --------------------  ---------------------

                  Land and buildings on operating
                      leases, net                                           $  6,045,197           $  4,009,712
                  Net investment in direct financing lease
                                                                                 344,884                351,555
                  Cash                                                            41,693                 50,579
                  Receivables                                                     67,370                     --
                  Accrued rental income                                          377,299                318,016
                  Other assets                                                     1,028                    474
                  Liabilities                                                     20,621                 29,459
                  Partners' capital                                            6,856,850              4,700,877
                  Revenues                                                       760,782                568,987
                  Net income                                                     630,846                476,978
</TABLE>

         The Partnership  recognized  income totaling  $309,381,  $244,344,  and
         $242,158,  for the  years  ended  December  31,  2001,  2000,  and 1999
         respectively,  from these joint  ventures  and the  properties  held as
         tenants-in-common with affiliates.


<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2001, 2000, and 1999


6.       Allocations and Distributions - Continued:
         -----------------------------------------

         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;  provided,
         however, that 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, 2001, 2000, and 1999


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 year
         ended December 31, 2001 and 2000.

         During each of the years ended  December 31, 2001,  2000, and 1999, the
         Partnership   declared   distributions   to  the  limited  partners  of
         $3,400,008.  No distributions have been made to the general partners to
         date.


<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2001, 2000, and 1999


7.       Income Taxes:
         ------------

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

<TABLE>
<CAPTION>

 <c>
                                                                           2001              2000              1999
                                                                      ----------------  ----------------  ----------------

         Net income for financial reporting purposes                     $  2,835,821       $ 3,089,297       $ 2,681,165

         Depreciation for tax reporting purposes in excess of
              depreciation for financial reporting purposes                   (54,090)          (95,523)          (76,982)

         Direct financing leases recorded as operating leases for
              tax reporting purposes                                          109,275           107,487            90,732

         Capitalization (deduction) of transaction costs for tax
              reporting purposes                                                   --          (215,307)          192,016

         Equity in earning of joint ventures for tax reporting
              purposes less than equity in earnings of joint
              ventures for financial reporting purposes                       (19,015)          (14,242)          (25,801)

         Gain on sale of property for financial reporting
              purposes deferred for tax reporting purposes                         --                --            36,702

         Loss on sale of property for financial reporting
              purposes in excess of loss for tax reporting                         --                --           352,285
              purposes

         Gain on sale of property for financial reporting less
              than gain for tax reporting purposes                             66,579                --                --

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

         Allowance for doubtful accounts                                       (5,674)            5,674              (532)

         Accrued rental income                                               (184,152)         (178,371)         (195,625)

         Rents paid in advance                                                  9,168            61,431            (8,249)
                                                                      ----------------  ----------------  ----------------

         Net income for federal income tax purposes                      $  2,814,418       $ 2,812,064       $ 3,045,711
                                                                      ================  ================  ================

</TABLE>




<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                                   Years Ended December 31, 2001, 2000, and 1999


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 Group,  Inc., a wholly owned  subsidiary of CNL Holdings,  Inc. CNL
         APF Partners,  LP (the  "Advisor") is a wholly owned  subsidiary of CNL
         American  Properties  Fund, Inc.  ("APF").  CNL Fund Advisors,  Inc., a
         majority owned subsidiary of CNL Financial Group,  Inc. until it merged
         with  and  into  APF  effective   September  1,  1999,  served  as  the
         Partnership's  advisor  until it  assigned  its rights and  obligations
         under a  management  agreement  with  the  Partnership  to the  Advisor
         effective   July  1,  2000.  The   individual   general   partners  are
         stockholders and directors of APF.

         The Advisor  provides  certain  services  relating to management of the
         Partnership and its properties pursuant to a management  agreement with
         the Partnership. In connection therewith, the Partnership agreed to pay
         the  Advisor  a  management  fee of one  percent  of the  sum of  gross
         revenues  from  properties  wholly  owned  by the  Partnership  and the
         Partnership's  allocable  share of gross revenues from joint  ventures.
         The management  fee,  which will not exceed fees which are  competitive
         for similar  services in the same  geographic  area,  may or may not be
         taken,  in whole or in part as to any year,  in the sole  discretion of
         the Advisor.  All or any portion of the  management fee not taken as to
         any fiscal year shall be deferred  without interest and may be taken in
         such other fiscal year as the Advisor shall determine.  The Partnership
         incurred  management  fees of $36,671,  $36,142,  and $36,152,  for the
         years ended December 31, 2001, 2000, and 1999, respectively.

         The Advisor is also entitled to receive a deferred,  subordinated  real
         estate   disposition  fee,  payable  upon  the  sale  of  one  or  more
         properties,  based on the  lesser of  one-half  of a  competitive  real
         estate  commission  or three  percent of the sales price if the Advisor
         provides a substantial  amount of services in connection with the sale.
         However,  if the 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.


<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2001, 2000, and 1999


8.       Related Party Transactions - Continued:
         ---------------------------------------

         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 a purchase
         price  of  approximately  $2,152,000.  CNL  XV  is  a  Florida  limited
         partnership and an affiliate of the general partners.  CNL BB Corp. had
         purchased  and  temporarily  held  title to this  property  in order to
         facilitate the  acquisition of the property by the  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, including closing costs.

         During  the  years  ended  December  31,  2001,  2000,  and  1999,  the
         Partnership's  advisor  and  its  affiliates  provided  accounting  and
         administrative  services  to the  Partnership  on a  day-to-day  basis,
         including  services  during 2000 and 1999  relating to the proposed and
         terminated  merger.  For the years ended  December 31, 2001,  2000, and
         1999, the expenses incurred for these services were $211,205,  $99,772,
         and $121,160, respectively.

         The amount due to related parties at December 31, 2001 and 2000 totaled
         $15,534, and $132,671, respectively.

9.       Concentration of Credit Risk:
         ----------------------------

         The  following  schedule  presents  total rental and earned income from
         individual  lessees,  each  representing  more than ten  percent of the
         Partnership's   total   rental  and  earned   income   (including   the
         Partnership's  share of total  rental  and  earned  income  from  joint
         ventures and the properties held as  tenants-in-common  with affiliates
         of the general partners) for each of the years ended December 31:

<TABLE>
<CAPTION>

 <C>
                                                                     2001                2000               1999
                                                                ---------------     ---------------    ----------------

           Flagstar Enterprises, Inc.                                $ 640,524           $ 644,467           $ 647,065
           Golden Corral Corp.                                         616,239             548,540             530,686
           Long John Silver's, Inc.                                    414,556             415,012             423,498
           Jack in the Box Inc. (formerly
                Foodmaker, Inc.)                                           N/A                 N/A             413,069

</TABLE>


<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2001, 2000, and 1999


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

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

<TABLE>
<CAPTION>

 <c>
                                                                     2001                2000               1999
                                                                ---------------     ---------------    ----------------

           Hardee's                                                  $ 640,524           $ 644,467           $ 647,065
           Golden Corral Family Steakhouse Restaurants
                                                                       616,239             548,540             530,686
           Burger King                                                 412,489             454,645             465,469
           Long John Silver's                                          414,556             415,012             423,498
           Jack in the Box                                                 N/A                 N/A             413,069
</TABLE>

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

         Although  the  Partnership's   properties  are  geographically  diverse
         throughout the United States 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.






<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2001, 2000, and 1999

10.      Selected Quarterly Financial Data:
         ---------------------------------

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

<TABLE>
<CAPTION>

 <c>
              2001 Quarter               First            Second            Third             Fourth             Year
         ------------------------    --------------    -------------     -------------    ---------------    --------------

         Revenue (1)                      $909,091         $956,078          $920,597           $952,079        $3,737,845
         Net income                        533,006          768,469           757,644            776,702         2,835,821
         Net income per
             Limited partner
             Unit                             0.13             0.19              0.19               0.20              0.71

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

         Revenue (1)                      $926,862         $912,896          $944,979         $1,033,358        $3,818,095
         Net income                        685,941          728,592           774,105            900,659         3,089,297
         Net income per
             limited partner
             unit                             0.17             0.18              0.19               0.23              0.77
</TABLE>

         (1)      Revenues include equity in earnings of joint ventures.

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


<PAGE>



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

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

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

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

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


Item 11.  Executive Compensation

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



<PAGE>



Item 12.  Security Ownership of Certain Beneficial Owners and Management

         As of March 15,  2002,  no person was known to the  Registrant  to be a
beneficial owner of more than five percent of the Units.

         The following  table sets forth,  as of March 15, 2002,  the beneficial
ownership interests of the General Partners in the Registrant.

<TABLE>
<CAPTION>

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

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

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


<PAGE>



Item 13.  Certain Relationships and Related Transactions

         The  table  below   summarizes  the  types,   recipients,   methods  of
computation and amounts of compensation,  fees and distributions paid or payable
by the  Partnership  to the General  Partners and their  affiliates for the year
ended  December 31, 2001,  exclusive of any  distributions  to which the General
Partners or their  affiliates  may be entitled by reason of their  purchase  and
ownership of Units.

<TABLE>
<CAPTION>

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

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       $211,205
                                       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       $36,671
affiliates                             revenues   from   Properties   wholly
                                       owned by the Partnership plus the
                                       Partnership's allocable share of
                                       gross revenues of joint ventures in
                                       which    the    Partnership    is   a
                                       co-venturer and the property owned
                                       with      an       affiliate       as
                                       tenants-in-common.   The   management
                                       fee,    which    will   not    exceed
                                       competitive fees for comparable
                                       services in the same geographic
                                       area,  may or may  not be  taken,  in
                                       whole or in part as to any  year,  in
                                       the sole discretion of affiliates of
                                       the General Partners. All or any
                                       portion of the management fee not
                                       taken as to any fiscal  year shall be
                                       deferred without interest and may be
                                       taken in such  other  fiscal  year as
                                       the affiliates shall determine.



<PAGE>



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

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

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

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



<PAGE>



                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
         And Recipient                         Method of Computation                  Ended December 31, 2001
---------------------------------      --------------------------------------      ------------------------------

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 addition, 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 a purchase price of
approximately $2,152,000. CNL XV is a Florida limited partnership and an
affiliate of the general partners. CNL BB Corp. had purchased and temporarily
held title to this property in order to facilitate the acquisition of the
property by the 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, including closing
costs.



<PAGE>


                                     PART IV


Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

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

         1.   Financial Statements

                  Report of Independent Certified Public Accountants

                  Balance Sheets at December 31, 2001 and 2000

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

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

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

                  Notes to Financial Statements

         2.   Financial Statement Schedule

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

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

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

3.       Exhibits

                  3.1      Affidavit and  Certificate of Limited  Partnership of
                           CNL Income Fund 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.)

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



<PAGE>



                                   SIGNATURES

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


                             CNL INCOME FUND XIII, LTD.

                             By:      CNL REALTY CORPORATION
                                      General Partner

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


                             By:      ROBERT A. BOURNE
                                      General Partner

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


                             By:      JAMES M. SENEFF, JR.
                                      General Partner

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


<PAGE>


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

<TABLE>
<CAPTION>

 <c>

                     Signature                                 Title                                   Date
                     ---------                                 -----                                   ----



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




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


</TABLE>



<PAGE>

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

                        SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                            December 31, 2001

<TABLE>
<CAPTION>

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

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

    Arby's Restaurant:
      Philadelphia, Pennsylvan-a (j)        $274,580           -           -        -

    Burger King Restaurants:
      Cincinnati, Ohio        -              256,901     669,537           -        -
      Dayton, Ohio            -              211,835     771,616           -        -
      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 Carol-na            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           -        -

    Lions Choice Restaurant:
      Overland Park, Kansas   -              452,691           -           -        -

    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           -           -        -

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

                                         $12,374,488  $9,887,950   $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 (-)            $786,973  $1,364,990           -        -
                                         ============ ===========  ==========  =======

Properties the Partnership has
   Invested in Under Direct
   Financing Leases

    Arby's Restaurant
      Philadelphia, Pennsylvan-a                   -    $515,075           -        -

    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           -        -

    Lion's Choice Restaurant:
      Overland Park, Kansas   -                    -     611,694           -        -

    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  $4,805,086    $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           -        -
                                         ============ ===========  ==========  =======




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






    $274,580           (f)    $274,580           -   1993    07/93          (d)


     256,901      669,537      926,438     188,021   1988    07/93          (b)
     211,835      771,616      983,451     216,687   1988    07/93          (b)
     247,183      723,304      970,487     203,120   1989    07/93          (b)
     174,843      618,815      793,658     173,777   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      22,832   1994    10/93          (i)
     530,494      540,983    1,071,477     137,765   1994    12/93          (b)



     611,589    1,071,838    1,683,427     308,141   1991    05/93          (b)
     625,527      964,122    1,589,649     275,941   1993    06/93          (b)
     617,016    1,103,437    1,720,453     286,767   1994    11/93          (b)


     197,336      417,418      614,754     117,220   1992    07/93          (b)
     160,149      424,977      585,126     119,343   1992    07/93          (b)
     164,004           (f)     164,004           -   1991    07/93          (d)
     218,639      460,364      679,003     129,280   1993    07/93          (b)
     204,516           (f)     204,516           -   1992    07/93          (d)
     240,363      412,621      652,984     115,873   1992    07/93          (b)
     226,815      431,574      658,389     121,196   1993    07/93          (b)


     323,929      601,054      924,983     170,436   1992    06/93          (b)
     315,842      590,708      906,550     165,938   1993    07/93          (b)
     404,752      592,173      996,925     166,295   1993    08/93          (b)


     452,691           (f)     452,691           -   1993    12/93          (d)


     292,370      356,444      648,814      33,528   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      37,910   1983    11/93          (b)
     463,937           (f)     463,937           -   1993    12/93          (d)


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



     290,195      641,709      931,904     169,936   1993    01/94          (b)
------------- ------------  ----------- -----------

 $12,374,488  $12,084,577   $24,459,065 $3,160,006
============= ============  =========== ===========








    $196,274     $434,428     $630,702    $116,561   1993    11/93          (b)
============= ============  =========== ===========







    $260,439     $545,126     $805,565    $132,222   1994    09/94          (b)
============= ============  =========== ===========







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







    $355,595     $517,030     $872,625     $84,926   1970    01/97          (b)
============= ============  =========== ===========







    $976,357     $974,016   $1,950,373    $129,962   1995    12/97          (b)
============= ============  =========== ===========







    $786,973   $1,364,990   $2,151,963     $34,122   2000    04/01          (b)
============= ============  =========== ===========






           -           (f)          (f)         (d)  1993    07/93          (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    12/93          (d)


           -           (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>

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

         NOTES TO SCHEDUE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 2001

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


<TABLE>
<CAPTION>

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

         Properties the Partnership has invested in Under Operating
              Leases:

             Balance, December 31, 1998                                        $  25,350,867         $   2,107,624
             Disposition                                                            (935,524 )            (112,983 )
             Reclassified from net investment in direct financing lease              356,444                    --
             Reclassified to net investment in direct financing lease               (360,090 )              (7,805 )
             Depreciation expense                                                         --               397,150
                                                                           ------------------   -------------------

             Balance, December 31, 1999                                           24,411,697             2,383,986
             Reclassified to net investment in direct financing lease               (504,839 )             (17,733 )
             Depreciation expense                                                         --               383,489
                                                                           ------------------   -------------------

             Balance, December 31, 2000                                           23,906,858             2,749,742
             Reclassified from net investment in direct financing lease              552,207                    --
             Depreciation expense                                                         --               410,264
                                                                           ------------------   -------------------

             Balance, December 31, 2001                                        $  24,459,065         $   3,160,006
                                                                           ==================   ===================

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

             Balance, December 31, 1998                                         $    630,702          $     73,118
             Depreciation expense                                                         --                14,481
                                                                           ------------------   -------------------

             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
                                                                           ==================   ===================
</TABLE>



<PAGE>


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

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

                                December 31, 2001


<TABLE>
<CAPTION>

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

      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, 1998                                        $   805,565           $    77,712
           Depreciation expense                                                       --                18,170
                                                                         ----------------     -----------------

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

      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, 1998                                        $   131,762              $     --
           Depreciation expense (d)                                                   --                    --
                                                                         ----------------     -----------------

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

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

           Balance, December 31, 2001                                        $   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, 2001

<TABLE>
<CAPTION>

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

      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, 1998 (h)                                   $   872,625           $     33,221
            Depreciation expense                                                      --                 17,235
                                                                         ----------------     ------------------

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


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

            Balance, December 31, 1998                                      $  1,950,373           $     32,556
            Depreciation expense                                                      --                 32,466
                                                                         ----------------     ------------------

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

</TABLE>


<PAGE>


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

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

                                December 31, 2001

<TABLE>
<CAPTION>

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

      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
                                                                         ================     ==================
</TABLE>

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

(c)      As of December 31, 2001, 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 $31,553,018 and
         $6,919,826,  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 land and building 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.

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