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

FORM 10-K

(Mark One)

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

For the fiscal year ended December 31, 2002

OR

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

For the transition period from to


Commission file number 0-23968

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

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

450 South Orange Avenue
Orlando, Florida 32801
(Address of principal executive offices, including zip code)

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

Securities registered pursuant to Section 12 (b) of the Act:

Title of each class: Name of exchange on which registered:
None Not Applicable

Securities registered pursuant to Section 12(g) of the Act:

Units of limited partnership interest ($10 per Unit)
(Title of class)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days: Yes X No

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [x]

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

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

DOCUMENTS INCORPORATED BY REFERENCE:
None


PART I


Item 1. Business

CNL Income Fund XIII, Ltd. (the "Registrant" or the "Partnership") is a
limited partnership which was organized pursuant to the laws of the State of
Florida on September 25, 1992. The general partners of the Partnership are
Robert A. Bourne, James M. Seneff, Jr. and CNL Realty Corporation, a Florida
corporation (the "General Partners"). Beginning on March 31, 1993, the
Partnership offered for sale up to $40,000,000 of limited partnership interests
(the "Units") (4,000,000 Units at $10 per Unit) pursuant to a registration
statement on Form S-11 under the Securities Act of 1933, as amended, effective
March 17, 1993. The offering terminated on August 26, 1993, at which date the
maximum offering proceeds of $40,000,000 had been received from investors who
were admitted to the Partnership as limited partners (the "Limited Partners").

The Partnership was organized to acquire both newly constructed and
existing restaurant properties, as well as properties upon which restaurants
were to be constructed (the "Properties"), which are leased primarily to
operators of national and regional fast-food and family-style restaurant chains
(the "Restaurant Chains"). Net proceeds to the Partnership from its offering of
Units, after deduction of organizational and offering expenses, totaled
$35,324,831. The net offering proceeds were used to acquire 47 Properties,
including ten Properties consisting of only land, two Properties owned by joint
ventures in which the Partnership is a co-venturer, and one Property acquired as
tenants-in-common with affiliates of the General Partners, to pay acquisition
fees to an affiliate of the General Partners totaling $2,200,000, to pay
miscellaneous acquisition expenses and to establish a working capital reserve
for Partnership purposes.

As of December 31, 1999, the Partnership owned 46 Properties, either
directly or indirectly through joint venture or tenancy in common arrangements.
During the year ended December 31, 2001, the Partnership sold its Property in
Mount Airy, North Carolina, to the tenant and reinvested the net sales proceeds
in a Golden Corral Property located in Blue Springs, Missouri, with an affiliate
of the General Partners as tenants-in-common. During the year ended December 31,
2002, the Partnership sold its Properties in Dayton, Ohio and Overland Park,
Kansas, and reinvested the majority of the net sales proceeds in two Properties
located in Houston, Texas and Lee's Summit, Missouri. As of December 31, 2002,
the Partnership owned 46 Properties. The 46 Properties include eight Properties
consisting of land only, interests in two Properties owned by joint ventures in
which the Partnership is a co-venturer and four Properties owned with affiliates
as tenants-in-common. Under the leases of the eight Properties consisting of
land only, the tenant owns the buildings currently on the land and has the
right, if not in default under the lease, to remove the buildings from the land
at the end of the lease terms. The Partnership generally leases the Properties
on a triple-net basis with the lessees responsible for all repairs and
maintenance, property taxes, insurance and utilities.

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

Leases

Although there are variations in the specific terms of the leases, the
following is a summarized description of the general structure of the
Partnership's leases. The leases of the Properties owned by the Partnership and
joint ventures in which the Partnership is a co-venturer and Properties owned as
tenants-in-common with affiliates of the General Partners provide for initial
terms ranging from 10 to 20 years (the average being 19 years), and expire
between 2003 and 2021. All leases are generally on a triple-net basis, with the
lessees responsible for all repairs and maintenance, property taxes, insurance
and utilities. The leases of the Properties provide for minimum base annual
rental payments (payable in monthly installments) ranging from approximately
$30,600 to $222,500. A majority of the leases provide for percentage rent, based
on sales in excess of a specified amount. In addition, the majority of the
leases provide that, commencing in specified lease years, the annual base rent
required under the terms of the lease will increase.

Generally, the leases of the Properties provide for two to five
five-year renewal options subject to the same terms and conditions as the
initial lease. Lessees of 37 of the Partnership's 46 Properties also have been
granted options to purchase Properties at the Property's then fair market value
after a specified portion of the lease term has elapsed. Fair market value will
be determined through an appraisal by an independent appraisal firm. Under the
terms of certain leases, the option purchase price may equal the Partnership's
original cost to purchase the Property (including acquisition costs), plus a
specified percentage from the date of the lease or a specified percentage of the
Partnership's purchase price, if that amount is greater than the Property's fair
market value at the time the purchase option is exercised.

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

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

In December 2002, AmeriKing Corporation, the parent company to National
Restaurant Enterprises, Inc. which is the tenant of the Property in Cincinnati,
Ohio, filed for bankruptcy protection. As of March 10, 2003, the Partnership has
continued receiving rental payments relating to this lease. While the tenant has
neither rejected nor affirmed the lease, there can be no assurance that it will
not be rejected in the future. The lost revenues that would result if the tenant
rejects this lease will have an adverse effect on the results of operations of
the Partnership if the Partnership is unable to lease the Property in a timely
manner.

Major Tenants

During 2002, three lessees of the Partnership, Flagstar Enterprises,
Inc., Long John Silver's, Inc., and Golden Corral Corporation, each contributed
more than ten percent of the Partnership's total rental revenues (including the
Partnership's share of rental revenues from Properties owned by joint ventures
and Properties owned with affiliates of the General Partners as
tenants-in-common arrangements). As of December 31, 2002, Flagstar Enterprises,
Inc. was the lessee under leases relating to 11 restaurants, Long John Silver's,
Inc. was the lessee under leases relating to five restaurants, and Golden Corral
Corporation was the lessee under leases relating to four restaurants. It is
anticipated that, based on the minimum rental payments required by the leases,
these three lessees will each continue to contribute more than ten percent of
the Partnership's total rental revenues in 2003. In addition, four Restaurant
Chains, Long John Silver's, Hardee's, Golden Corral Family Steakhouse
Restaurants ("Golden Corral"), and Burger King, each accounted for more than ten
percent of the Partnership's total rental revenues during 2002 (including the
Partnership's share of rental revenues from Properties owned by joint ventures
and Properties owned with affiliates of the General Partners as
tenants-in-common arrangements). It is anticipated that these four Restaurant
chains each will continue to account for more than ten percent of the
Partnership's total rental revenues under the terms of the leases in 2003. Any
failure of these lessees or Restaurant Chains could materially affect the
Partnership's income if the Partnership is not able to re-lease the Properties
in a timely manner. No single tenant or group of affiliated tenants lease
Properties with an aggregate carrying value in excess of 20 percent of the total
assets of the Partnership.


Joint Venture and Tenancy in Common Arrangements

The Partnership has entered into the following joint venture and
tenancy in common arrangements as of December 31, 2002:



Entity Name Year Ownership Partners Property

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

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

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

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

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

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



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

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

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

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

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

Certain Management Services

RAI Restaurants, Inc. (formerly known as CNL Restaurants XVIII, Inc.),
an affiliate of the General Partners, provides certain services relating to
management of the Partnership and its Properties pursuant to a management
agreement with the Partnership. CNL APF Partners, LP assigned its rights in, and
its obligations under, the management agreement with the Partnership to RAI
Restaurants, Inc. ("Advisor") effective January 1, 2002. All of the terms and
conditions of the management agreement, including the payment of fees, remained
unchanged. Under this agreement, the Advisor is responsible for collecting
rental payments, inspecting the Properties and the tenants' books and records,
assisting the Partnership in responding to tenant inquiries and notices, and
providing information to the Partnership about the status of the leases and the
Properties. The Advisor also assists the General Partners in negotiating the
leases. For these services, the Partnership had agreed to pay the Advisor an
annual fee of one percent of the sum of gross rental revenues from Properties
wholly owned by the Partnership plus the Partnership's allocable share of gross
revenues of joint ventures in which the Partnership is a co-venturer, but not in
excess of competitive fees for comparable services.

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

Competition

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

Employees

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


Item 2. Properties

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

Description of Properties

Land. The Partnership's Property sites, owned either directly or
indirectly, range from approximately 19,900 to 145,400 square feet depending
upon building size and local demographic factors. Sites purchased by the
Partnership are in locations zoned for commercial use which have been reviewed
for traffic patterns and volume.

The following table lists the Properties owned by the Partnership,
either directly or indirectly, as of December 31, 2002 by state. More detailed
information regarding the location of the Properties is contained in the
Schedule of Real Estate and Accumulated Depreciation.

State Number of Properties

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

Buildings. Each of the Properties owned by the Partnership, either
directly or indirectly, includes a building that is one of a Restaurant Chain's
approved designs. However, the buildings located on the eight Checkers
Properties are owned by the tenant while the land parcels are owned by the
Partnership. The buildings generally are rectangular and are constructed from
various combinations of stucco, steel, wood, brick and tile. The sizes of the
building owned by the Partnership range from approximately 1,900 to 11,500
square feet. All buildings on Properties are freestanding and surrounded by
paved parking areas. Buildings are suitable for conversion to various uses,
although modifications may be required prior to use for other than restaurant
operations. As of December 31, 2002, the Partnership had no plans for renovation
of the Properties. Depreciation expense is computed for buildings and
improvements using the straight-line method using a depreciable life of 40 years
for federal income tax purposes.

As of December 31, 2002, the aggregate cost of the Properties owned by
the Partnership and joint ventures (including the Properties owned through
tenancy in common arrangements) for federal income tax purposes was $31,225,186
and $6,852,267, respectively.


The following table lists the Properties owned by the Partnership,
either directly or indirectly, as of December 31, 2002 by Restaurant Chain.

Restaurant Chain Number of Properties

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

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

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

Leases. The Partnership leases the Properties to operators of selected
national and regional fast-food restaurant chains. The leases are generally on a
long-term "triple net" basis, meaning that the tenant is responsible for
repairs, maintenance, property taxes, utilities and insurance.

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



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

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


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

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

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



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

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

Total 46 $ 3,635,037 100.00%
========= ================ =================


Leases with Major Tenants. The terms of the leases with the
Partnership's major tenants as of December 31, 2002 (see Item 1. Business -
Major Tenants), are substantially the same as those described in Item 1.
Business - Leases.

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

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

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


Item 3. Legal Proceedings

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


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

Not applicable.


PART II


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

(a) As of March 10, 2003, there were 3,027 holders of record of the Units.
There is no public trading market for the Units, and it is not anticipated that
a public market for the Units will develop. During 2002, Limited Partners who
wished to sell their Units may have offered the Units for sale pursuant to the
Partnership's distribution reinvestment plan (the "Plan"), and Limited Partners
who wished to have their distributions used to acquire additional Units (to the
extent Units were available for purchase), may have done so pursuant to such
Plan. The General Partners have the right to prohibit transfers of Units. From
inception through December 31, 2002, the price paid for any Unit transferred
pursuant to the Plan ranged from $8.67 to $9.50 per Unit. The price paid for any
Unit transferred other than pursuant to the Plan was subject to negotiation by
the purchaser and the selling Limited Partner. The Partnership will not redeem
or repurchase Units.

The following table reflects, for each calendar quarter, the high, low
and average sales prices for transfers of Units during 2002 and 2001 other than
pursuant to the Plan.



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

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


(1) A total of 59,780 and 18,355 Units were transferred other than pursuant
to the Plan for the years ended December 31, 2002 and 2001,
respectively.

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

For each of the years ended December 31, 2002 and 2001, the Partnership
declared cash distributions of $3,400,008 to the Limited Partners. Distributions
of $850,002 were declared at the close of each of the Partnership's calendar
quarters during 2002 and 2001 to the Limited Partners. These amounts include
monthly distributions made in arrears for the Limited Partners electing to
receive such distributions on this basis. No amounts distributed to the Limited
Partners for the years ended December 31, 2002 and 2001 are required to be or
have been treated by the Partnership as a return of capital for purposes of
calculating the Limited Partners' return on their adjusted capital
contributions. No distributions have been made to the General Partners to date.

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

(b) Not applicable.

Item 6. Selected Financial Data



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

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

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

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

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

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

Cash distributions
declared per unit 0.85 0.85 0.85 0.85 0.85

At December 31:
Total assets $33,142,001 $33,149,433 $33,848,645 $34,337,261 $34,687,493
Total partners' capital 32,088,198 32,155,662 32,719,849 33,030,560 33,749,403


(1) Income from continuing operations for the years ended December 31,
2001, 2000 and 1998 include provisions for write-down of assets of
$56,506, $51,618 and $605,290, respectively. Income from continuing
operations for the year ended December 31, 1999, includes a loss on
removal of building of $352,285 and a gain on sale of assets of
$176,159.

(2) Certain items in the prior year's financial statements have been
reclassified to conform to 2002 presentation. These reclassifications
had no effect on total net income. The results of operations relating
to properties that were either disposed of or were classified as held
for sale as of December 31, 2002 are reported as discontinued
operations. The results of operations relating to properties that were
identified for sale as of December 31, 2001 but sold subsequently are
reported as continuing operations.

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

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


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

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

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

As of December 31, 2000, the Partnership owned 41 Properties directly
and five Properties indirectly through joint venture or tenancy in common
arrangements. As of December 31, 2002 and 2001, the Partnership owned 40
Properties directly and six Properties indirectly through joint venture or
tenancy in common arrangements.

Capital Resources

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

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

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

In April 2001, the Partnership sold its Property in Mount Airy, North
Carolina and received net sales proceeds of approximately $947,000. Due to the
fact that during 2001 the Partnership had recorded a provision for write-down of
assets for this Property, no additional gain or loss was recognized upon sale.
In April 2001, the Partnership reinvested approximately $882,300 of these sales
proceeds in a Property in Blue Springs, Missouri, as tenants-in-common, with CNL
Income Fund XV, Ltd. ("CNL XV"), a Florida limited partnership and an affiliate
of the General Partners. The Partnership and CNL XV, as tenants-in-common,
acquired this Property from CNL BB Corp., an affiliate of the General Partners.
The affiliate had purchased and temporarily held title to the Property in order
to facilitate the acquisition of the Property by the Partnership and CNL XV, as
tenants-in-common. The purchase price paid by the Partnership and CNL XV, as
tenants-in-common, represented the costs incurred by the affiliate to acquire
the Property. As of December 31, 2002, the Partnership owned a 41% interest in
the profits and losses of the Property.

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

In June 2002, the Partnership sold its Property in Dayton, Ohio to the
tenant and received net sales proceeds of approximately $1,049,900 resulting in
a gain on disposal of discontinued operations of approximately $303,200. In
addition, in June 2002, the Partnership reinvested the majority of these net
sales proceeds in a Property in Houston, Texas. The Partnership acquired this
Property from CNL Funding 2001-A, LP, a Delaware limited partnership and an
affiliate of the General Partners. CNL Funding 2001-A, LP had purchased and
temporarily held title to the Property in order to facilitate the acquisition of
the Property by the Partnership. The purchase price paid by the Partnership
represented the costs incurred by CNL Funding 2001-A, LP to acquire and carry
the Property. The General Partners believe that this transaction, or a portion
thereof, relating to the sale of the Property in Dayton, Ohio and the
reinvestment of the net sales proceeds, described above, will qualify as a
like-kind transaction for federal income tax purpose.

In December 2002, AmeriKing Corporation, the parent company to National
Restaurant Enterprises, Inc. which is the tenant of the Property in Cincinnati,
Ohio, filed for bankruptcy protection. As of March 15, 2003, the Partnership has
continued receiving rental payments relating to this lease. While the tenant has
neither rejected nor affirmed the lease, there can be no assurance that it will
not be rejected in the future. The lost revenues that would result if the tenant
rejects this lease will have an adverse effect on the results of operations of
the Partnership if the Partnership is unable to lease the Property in a timely
manner.

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

Currently, rental income from the Partnership's Properties are invested
in short-term highly liquid investments such as demand deposit accounts at
commercial banks, money market accounts and certificates of deposit with less
than a 90-day maturity date, pending use of such funds to invest in an
additional Property, and to pay Partnership expenses, or to make distributions
to partners. At December 31, 2002, the Partnership had $1,275,846 invested in
such short-term investments as compared to $785,750 at December 31, 2001. The
increase in cash and cash equivalents at December 31, 2002, as compared to
December 31, 2001, was primarily due to approximately $275,000 in remaining net
sales proceeds pending reinvestment in an additional Property. As of December
31, 2002, the average interest rate earned by the Partnership on the rental
income deposited in demand deposit accounts at commercial banks was
approximately 1.31% annually. The funds remaining at December 31, 2002, after
payment of distributions and other liabilities, will be used to invest in an
additional Property, and to meet the Partnership's working capital needs.

Short-Term Liquidity

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

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

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

Due to low operating expenses and ongoing cash flow, the General
Partners believe that the Partnership has sufficient working capital reserves at
this time. In addition, because all leases of the Partnership's Properties are
on a triple-net basis, it is not anticipated that a permanent reserve for
maintenance and repairs will be established at this time. To the extent,
however, that the Partnership has insufficient funds for such purposes, the
General Partners will contribute to the Partnership an aggregate amount of up to
one percent of the offering proceeds for maintenance and repairs. The General
Partners have the right to cause the Partnership to maintain additional reserves
if, in their discretion, they determine such reserves are required to meet the
Partnership's working capital needs.

The Partnership generally distributes cash from operations remaining
after the payment of the operating expenses of the Partnership, to the extent
that the General Partners determine that such funds are available for
distribution. Based on current and for the years ended December 31, 2001 and
2000, future anticipated cash from operations, the Partnership declared
distributions to the Limited Partners of $3,400,008 for each of the years ended
December 31, 2002, 2001 and 2000. This represents distributions of $0.85 per
Unit for each of the years ended December 31, 2002, 2001 and 2000. No
distributions were made to the General partners during the years ended December
31, 2002, 2001 and 2000. No amounts distributed to the Limited Partners for the
years ended December 31, 2002, 2001 and 2000, are required to be or have been
treated by the Partnership as a return of capital for purposes of calculating
the Limited Partners' return on their adjusted capital contributions. The
Partnership intends to continue to make distributions of cash available for
distribution to the Limited Partners on a quarterly basis.

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

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

Long-Term Liquidity

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

Critical Accounting Policies

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

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

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

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

Results of Operations

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

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

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

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

During 2002, three lessees of the Partnership, Flagstar Enterprises,
Inc., Long John Silver's, Inc., and Golden Corral Corporation, each contributed
more than ten percent of the Partnership's total rental revenues (including the
Partnership's share of rental revenues from Properties owned by joint ventures
and Properties owned with affiliates of the General Partners as
tenants-in-common arrangements). As of December 31, 2002, Flagstar Enterprises,
Inc. was the lessee under leases relating to 11 restaurants, Long John Silver's,
Inc. was the lessee under leases relating to five restaurants, and Golden Corral
Corporation was the lessee under leases relating to four restaurants. It is
anticipated that, based on the minimum rental payments required by the leases,
these three lessees will each continue to contribute more than ten percent of
the Partnership's total rental revenues in 2003. In addition, four Restaurant
Chains, Long John Silver's, Hardee's, Golden Corral Family Steakhouse
Restaurants ("Golden Corral"), and Burger King, each accounted for more than ten
percent of the Partnership's total rental revenues during 2002 (including the
Partnership's share of rental revenues from Properties owned by joint ventures
and Properties owned with affiliates of the General Partners as
tenants-in-common arrangements). It is anticipated that these four Restaurant
chains each will continue to account for more than ten percent of the
Partnership's total rental revenues under the terms of the leases in 2003. Any
failure of these lessees or Restaurant Chains could materially affect the
Partnership's income if the Partnership is not able to re-lease the Properties
in a timely manner.

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

Operating expenses, including depreciation and amortization expense and
provision for write-down of assets, were $780,406 and $873,653 for the years
ended December 31, 2002 and 2001, respectively. The decrease in operating
expenses during 2002, as compared to the same period in 2001, was partially
attributable to a decrease in the costs incurred for administrative expenses for
servicing the Partnership and its Properties, and a decrease in state tax
expense. In addition, the decrease in operating expenses during 2002, was
partially due to lower Property expenses relating to Properties with a tenant
who was experiencing financial difficulties; the leases of these Properties have
been assigned to new tenants.

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

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

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

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

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

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

In addition, during the years ended December 31, 2001 and 2000, the
Partnership earned $309,381 and $244,344, respectively, attributable to net
income earned by joint ventures in which the Partnership is a co-venturer. The
increase in net income earned by joint ventures during 2001, as compared to
2000, was primarily attributable to the fact that in April 2001, the Partnership
used the majority of the net sales proceeds received from the sale of its
Property in Mount Airy, North Carolina, to acquire an interest in a Property in
Blue Springs, Missouri, as tenants-in-common with CNL XV. The increase in net
income earned by joint ventures, during 2001, is also partially due to an
increase in contingent rental income attributable to an increase in gross sales
of the restaurant Property in Miami, Florida, the lease of which requires the
payment of contingent rental income. The Partnership owns approximately a 48%
interest in this Property, as tenants-in-common, with CNL Income Fund III, Ltd.,
CNL Income Fund VII, Ltd., and CNL Income Fund X, Ltd., each a Florida limited
partnership and affiliate of the General Partners.

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

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

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

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

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

The Partnership's leases as of December 31, 2002, are generally
triple-net leases and contain provisions that the General Partners believe
mitigate the adverse effect of inflation. Such provisions include clauses
requiring the payment of percentage rent based on certain restaurant sales above
a specified level and/or automatic increases in base rent at specified times
during the term of the lease. Inflation, overall, has had a minimal effect on
results of operations of the Partnership. Continued inflation may cause capital
appreciation of the Partnership's Properties. Inflation and changing prices,
however, also may have an adverse impact on the sales of the restaurants and on
potential capital appreciation of the Properties.

In January 2003, FASB issued FASB Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities" to expand upon and strengthen
existing accounting guidance that addresses when a company should include the
assets, liabilities and activities of another entity in its financial
statements. To improve financial reporting by companies involved with variable
interest entities (more commonly referred to as special-purpose entities or
off-balance sheet structures), FIN 46 requires that a variable interest entity
be considered by a company if that company is subject to a majority risk of loss
from the variable interest entity's activities or entitled to receive a majority
of the entity's residual returns or both. Prior to FIN 46, a company generally
included another entity in its consolidated financial statements only if it
controlled the entity through voting interests. Consolidation of variable
interests entities will provide more complete information about the resources,
obligations, risks and opportunities of the consolidated company. The
consolidation requirements of FIN 46 apply immediately to variable interest
entities created after January 31, 2003, and to older entities in the first
fiscal year or interim period beginning after June 15, 2003. Management believes
adoption of this standard may result in either consolidation or additional
disclosure requirements with respect to the Partnership's unconsolidated joint
ventures or Properties held with affiliates of the General Partners as
tenants-in-common, which are currently accounted for under the equity method.
However, such consolidation is not expected to significantly impact the
Partnership's results of operations.


Item 7a. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.


Item 8. Financial Statements and Supplementary Data

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


CONTENTS





Page
Report of Independent Certified Public Accountants 18
Financial Statements:
Balance Sheets 19
Statements of Income 20
Statements of Partners' Capital 21
Statements of Cash Flows 22-23
Notes to Financial Statements 24-35








Report of Independent Certified Public Accountants



To the Partners
CNL Income Fund XIII, Ltd.



In our opinion, the accompanying balance sheets and the related statements of
income, of partners' capital and of cash flows present fairly, in all material
respects, the financial position of CNL Income Fund XIII, Ltd. (a Florida
limited partnership) at December 31, 2002 and 2001, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 2002 in conformity with accounting principles generally accepted in
the United States of America. In addition, in our opinion, the financial
statement schedule listed in the index appearing under item 15(a)(2) present
fairly, in all material respects, the information set forth therein when read in
conjunction with the related financial statements. These financial statements
and financial statement schedule are the responsibility of the Partnership's
management; our responsibility is to express an opinion on these financial
statements and financial statement schedule based on our audits. We conducted
our audits of these statements in accordance with auditing standards generally
accepted in the United States of America, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

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




/s/ PricewaterhouseCoopers LLP

Orlando, Florida
January 31, 2003




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

BALANCE SHEETS




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

ASSETS


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

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



LIABILITIES AND PARTNERS' CAPITAL


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



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

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

See accompanying notes to financinal statements.



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

STATEMENTS OF INCOME




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

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

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

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

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

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

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

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

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

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

Weighted Average Number of Limited Partner Units Outstanding 4,000,000 4,000,000 4,000,000
================ ================ ===============


See accompanying notes to financial statements.


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

STATEMENTS OF PARTNERS' CAPITAL

Years Ended December 31, 2002, 2001 and 2000




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

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

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

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

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

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

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

Balance, December 31, 2002 $ 1,000 $ 190,934 $ 40,000,000 $ (31,328,440) $ 27,889,873 $ (4,665,169)
============= ============== =============== ============== ============== =============


See accompanying notes to financial statements.


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

$ 33,030,560



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

32,719,849



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

32,155,662



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

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


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

STATEMENTS OF CASH FLOWS



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

Increase (Decrease) in Cash and Cash
Equivalents:

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

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

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

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


Cash Flows from Financing Activities:
Distributions to limited partners (3,400,008 ) (3,400,008 ) (3,400,008 )
----------------- ----------------- -----------------

Net cash used in financing activities (3,400,008 ) (3,400,008 ) (3,400,008 )
----------------- ----------------- -----------------


Net Increase (Decrease) in Cash and Cash
Equivalents 490,096 (32,481 ) (127,571 )

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


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

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

See accompanying notes to financial statements.


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

STATEMENT OF CASH FLOWS - CONTINUED




Year Ended December 31,

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

Supplemental Schedule of Non-Cash
Financing Activities:

Distributions declared and unpaid at
December 31 $ 850,002 $ 850,002 $ 850,002
================= ================= =================

See accompanying notes to financial statements.



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

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2002, 2001 and 2000

1. Significant Accounting Policies:

Organization and Nature of Business - CNL Income Fund XIII, Ltd. (the
"Partnership") is a Florida limited partnership that was organized for
the purpose of acquiring both newly constructed and existing restaurant
properties, as well as properties upon which restaurants were to be
constructed, which are leased primarily to operators of national and
regional fast-food and family-style restaurant chains.

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

Real Estate and Lease Accounting - The Partnership records the real
estate property acquisitions at cost. The properties are leased to
third parties generally on a triple-net basis, whereby the tenant is
responsible for all operating expenses relating to the property,
including property taxes, insurance, maintenance and repairs. During
the years ended December 31, 2002, 2001, and 2000, tenants paid
directly to real estate taxing authorities approximately $523,100,
$501,300, and $453,000, respectively, in real estate taxes in
accordance with the terms of their triple net leases with the
Partnership. The leases of the Partnership provide for base minimum
annual rental payments payable in monthly installments. In addition,
certain leases provide for contingent rental revenues based on the
tenants' gross sales in excess of a specified threshold. The
partnership defers recognition of the contingent rental revenues until
the defined thresholds are met. The leases are accounted for using
either the direct financing or the operating methods. Such methods are
described below:

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

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

Accrued rental income represents the aggregate amount of
income recognized on a straight-line basis in excess of
scheduled rental payments to date. In contrast, deferred
rental income represents the aggregate amount of scheduled
rental payments to date (including rental payments due during
construction and prior to the property being placed in
service) in excess of income recognized on a straight-line
basis over the lease term commencing on the date the property
is placed in service.


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

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2002, 2001 and 2000


1. Significant Accounting Policies - Continued:

Substantially all leases are for 15 to 20 years and provide
for minimum and contingent rentals. The lease options
generally allow tenants to renew the leases for two to five
successive five-year periods subject to the same terms and
conditions as the initial lease. Most leases also allow the
tenant to purchase the property at fair market value after a
specified portion of the lease has elapsed.

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

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

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

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

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

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

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

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


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

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2002, 2001, and 2000


1. Significant Accounting Policies - Continued:

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

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

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

FASB Interpretation No. 46 ("FIN 46") - In January 2003, FASB issued
FASB Interpretation No. 46 ("FIN 46"), "Consolidation of Variable
Interest Entities" to expand upon and strengthen existing accounting
guidance that addresses when a company should include the assets,
liabilities and activities of another entity in its financial
statements. To improve financial reporting by companies involved with
variable interest entities (more commonly referred to as
special-purpose entities or off-balance sheet structures), FIN 46
requires that a variable interest entity be considered by a company if
that company is subject to a majority risk of loss from the variable
interest entity's activities or entitled to receive a majority of the
entity's residual returns or both. Prior to FIN 46, a company generally
included another entity in its consolidated financial statements only
if it controlled the entity through voting interests. Consolidation of
variable interests entities will provide more complete information
about the resources, obligations, risks and opportunities of the
consolidated company. The consolidation requirements of FIN 46 apply
immediately to variable interest entities created after January 31,
2003, and to older entities in the first fiscal year or interim period
beginning after June 15, 2003. Management believes adoption of this
standard may result in either consolidation or additional disclosure
requirements with respect to the Partnership's unconsolidated joint
ventures or properties held with affiliates of the general partners as
tenants-in-common, which are currently accounted for under the equity
method. However, such consolidation is not expected to significantly
impact the Partnership's results of operations.


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

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2002, 2001, and 2000


2. Real Estate Properties with Operating Leases - Continued:

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

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

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

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

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

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

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

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

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

3. Net Investment in Direct Financing Leases:

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



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

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

Net investment in direct financing
leases $ 5,561,235 $ 5,182,644
====================== ======================




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

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2002, 2001, and 2000


3. Net Investment in Direct Financing Leases - Continued:

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

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

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

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

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

4. Investment in Joint Ventures:

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

The Partnership also owns properties in Arvada, Colorado; Akron, Ohio;
Miami, Florida; and Blue Springs, Missouri, each as tenants-in-common
with affiliates of the general partners. As of December 31, 2002, the
Partnership owned a 66.13%, 63.09%, 47.83%, and 41% interest,
respectively, in the properties.

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

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

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


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

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2002, 2001, and 2000


4. Investment in Joint Ventures - Continued:




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

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

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

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

Net Income (Loss) $ 634,887 $ 630,846 $ 476,978
==================== ================== =================


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

5. Discontinued Operations:

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

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

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

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2002, 2001, and 2000


5. Discontinued Operations - Continued:

The operating results of discontinued operations are as follows:



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

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

Income from discontinued operations $ 521,378 $ 212,924 $ 216,854
==================== ================== =================



6. Allocations and Distributions:

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

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

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

Generally, net sales proceeds from a sale of properties, in liquidation
of the Partnership will be used in the following order: (i) first to
pay and discharge all of the Partnership's liabilities to creditors,
(ii) second, to establish reserves that may be deemed necessary for any
anticipated or unforeseen liabilities or obligations of the
Partnership, (iii) third, to pay all of the Partnership's liabilities,
if any, to the general and limited partners, (iv) fourth, after
allocations of net income, gains and/or losses, to the partners with
positive capital account balances, in proportion to such balances, up
to amounts sufficient to reduce such positive balances to zero, and (v)
thereafter, any funds remaining shall then be distributed 95 percent to
the limited partners and five percent to the general partners.


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

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2002, 2001, and 2000


6. Allocations and Distributions - Continued:

Effective January 1, 2000, the general partners waived their right to
receive future distributions from the Partnership, including both
distributions of operating cash flow and distributions of liquidation
proceeds, to the extent that the cumulative amount of such
distributions would exceed the balance in the general partners' capital
account as of December 31, 1999. Accordingly, for years commencing
January 1, 2000 and after, the Partnership's net income will be
allocated entirely among the limited partners. However, if losses are
allocated to the general partners in a year, an amount of income equal
to the sum of such losses may be allocated to the general partner in
succeeding years. Accordingly, the general partners were not allocated
any net income and did not receive any distributions during the years
ended December 31, 2002, 2001, and 2000.

During each of the years ended December 31, 2002, 2001, and 2000, the
Partnership declared distributions to the limited partners of
$3,400,008. No distributions have been made to the general partners to
date.

7. Income Taxes:

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


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


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

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

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

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

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

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

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

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

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

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

Net income for federal income tax purposes $ 3,343,862 $ 2,814,418 $ 2,812,064
=============== =============== ===============


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

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2002, 2001, and 2000


8. Related Party Transactions:

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

The Advisor provides services pursuant to a management agreement with
the partnership. In connection therewith, the Partnership agreed to pay
certain Advisor management fees of one percent of the sum of gross
revenues from properties wholly owned by the Partnership and the
Partnership's allocable share of gross revenues from joint ventures.
Any portion of the Management fee not paid is deferred without
interest. The Partnership incurred management fees of $37,535, $36,671,
and $36,142, for the years ended December 31, 2002, 2001, and 2000,
respectively.

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

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

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

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

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2002, 2001, and 2000


8. Related Party Transactions - Continued:

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

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

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

9. Concentration of Credit Risk:

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



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

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


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



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

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




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

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2002, 2001, and 2000


9. Concentration of Credit Risk - Continued:

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

10. Selected Quarterly Financial Data:

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



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

Continuing Operations (1):
Revenues $786,877 $788,839 $831,438 $876,642 $3,283,796
Equity in earnings of joint
ventures 75,664 75,829 76,297 79,986 307,776
Income from continuing
operations 636,981 673,768 728,972 771,445 2,811,166

Discontinued Operations (1):
Revenues 89,603 54,084 162,777 -- 306,464
Income (loss) from discontinued
operations (23,158 ) 355,117 189,419 -- 521,378

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

Net income per limited
Partner unit:
Continuing operations $ 0.16 $ 0.17 $ 0.18 $ 0.19 $ 0.70
Discontinued operations
(0.01 ) 0.09 0.05 -- 0.13
---------- ------------ ----------- ----------- ------------
Total $ 0.15 $ 0.26 $ 0.23 $ 0.19 $ 0.83
========== ============ =========== =========== ============



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

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2002, 2001, and 2000


10. Selected Quarterly Financial Data - Continued:



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

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

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

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

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


(1) Certain items in the quarterly financial data have been reclassified to
conform to the 2002 presentation. This reclassification had no effect
on total net income. The results of operations relating to properties
that were either disposed of or were classified as held for sale as of
December 31, 2002 are reported as discontinued operations for all
periods presented. The results of operations relating to properties
that were identified for sale as of December 31, 2001 but sold
subsequently are reported as continuing operations.

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

None.

PART III


Item 10. Directors and Executive Officers of the Registrant

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

James M. Seneff, Jr., age 56. Since 1971, Mr. Seneff has been active in
the acquisition, development, and management of real estate projects and,
directly or through an affiliated entity, has served as a general partner or
co-venturer in over 100 real estate ventures. These ventures have involved the
financing, acquisition, construction, and leasing of restaurants, office
buildings, apartment complexes, hotels, and other real estate. Mr. Seneff has
served as Director and Chairman of the Board of APF, a public, unlisted real
estate investment trust, since 1994. Mr. Seneff served as Chief Executive
Officer of APF from 1994 through August 1999, and has served as co-Chief
Executive Officer of APF since December 2000. Mr. Seneff served as Chairman of
the Board and Chief Executive Officer of CNL Fund Advisors, Inc., formerly the
Partnership's advisor, until it merged with a wholly-owned subsidiary of APF in
September 1999, and in June 2000, was re-elected to those positions of CNL Fund
Advisors, Inc. Mr. Seneff is a principal stockholder of CNL Holdings, Inc., the
parent company of CNL Financial Group, Inc. (formerly CNL Group, Inc.), a
diversified real estate company, and has served as a Director, Chairman of the
Board and Chief Executive Officer of CNL Financial Group, Inc. since its
formation in 1980. CNL Financial Group, Inc. is the parent company, either
directly or indirectly through subsidiaries, of CNL Real Estate Services, Inc.,
CNL Capital Markets, Inc., CNL Investment Company and CNL Securities Corp., all
of which are engaged in the business of real estate finance. Mr. Seneff also
serves as a Director, Chairman of the Board and Chief Executive Officer of CNL
Hospitality Properties, Inc., a public, unlisted real estate investment trust,
as well as, CNL Hospitality Corp., its advisor. In addition, he serves as a
Director, Chairman of the Board and Chief Executive Officer of CNL Retirement
Properties, Inc., a public, unlisted real estate investment trust and its
advisor, CNL Retirement Corp. Since 1992, Mr. Seneff has also served as a
Director, Chairman of the Board and Chief Executive Officer of Commercial Net
Lease Realty, Inc., a public real estate investment trust that is listed on the
New York Stock Exchange. Mr. Seneff has also served as a Director, Chairman of
the Board and Chief Executive Officer of CNL Securities Corp. since 1979; CNL
Investment Company since 1990; and CNL Institutional Advisors, Inc., a
registered investment advisor for pension plans, since 1990. Mr. Seneff formerly
served as a Director of First Union National Bank of Florida, N.A., and
currently serves as the Chairman of the Board of CNL Bank, an independent,
state-chartered commercial bank. Mr. Seneff previously served on the Florida
State Commission on Ethics and is a former member and past Chairman of the State
of Florida Investment Advisory Council, which recommends to the Florida Board of
Administration investments for various Florida employee retirement funds. The
Florida Board of Administration, Florida's principal investment advisory and
money management agency, oversees the investment of more than $60 billion of
retirement funds. Mr. Seneff received his degree in Business Administration from
Florida State University in 1968.

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

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

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

Section 16(a) Beneficial Ownership Reporting Compliance

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

Based solely on the General Partners' review of the copies of such
forms the Partnership has received and written representations from certain
Reporting Persons that they were not required to file Forms 5 for the last
fiscal year, the General Partners believe that all Reporting Persons complied
with all filing requirements applicable to them with respect to transactions
during fiscal 2002.


Item 11. Executive Compensation

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


Item 12. Security Ownership of Certain Beneficial Owners and Management

As of March 10, 2003, no person was known to the Registrant to be a
beneficial owner of more than five percent of the Units.

The following table sets forth, as of March 10, 2003, the beneficial
ownership interests of the General Partners in the Registrant.



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%
========



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

The Partnership does not have any equity compensation plans.


Item 13. Certain Relationships and Related Transactions

The table below summarizes the types, recipients, methods of
computation and amounts of compensation, fees and distributions paid or payable
by the Partnership to the General Partners and their affiliates for the year
ended December 31, 2002, exclusive of any distributions to which the General
Partners or their affiliates may be entitled by reason of their purchase and
ownership of Units.



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

Reimbursement to affiliates for Operating expenses are reimbursed at Accounting and
operating expenses the lower of cost or 90% of the administrative services:
prevailing rate at which comparable $199,488
services could have been obtained in
the same geographic area.
Affiliates of the General Partners
from time to time incur certain
operating expenses on behalf of the
Partnership for which the
Partnership reimburses the
affiliates without interest.

Annual management fee to One percent of the sum of gross $37,535
affiliates revenues from Properties wholly
owned by the Partnership plus the
Partnership's allocable share of
gross revenues of joint ventures in
which the Partnership is a
co-venturer and the property owned
with an affiliate as
tenants-in-common. The management
fee, which will not exceed
competitive fees for comparable
services in the same geographic
area, may or may not be taken, in
whole or in part as to any year, in
the sole discretion of affiliates of
the General Partners. All or any
portion of the management fee not
taken as to any fiscal year shall be
deferred without interest and may be
taken in such other fiscal year as
the affiliates shall determine.






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

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.





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

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.


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

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


Item 14. Controls and Procedures

The General Partners maintain a set of disclosure controls and
procedures designed to ensure that information required to be disclosed in the
Partnership's filings under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms. The principal executive
and financial officers of the corporate General Partner have evaluated the
Partnership's disclosure controls and procedures within 90 days prior to the
filing of this Annual Report on Form 10-K and have determined that such
disclosure controls and procedures are effective.

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

PART IV


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

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

1. Financial Statements



Report of Independent Certified Public Accountants

Balance Sheets at December 31, 2002 and 2001

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

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

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

Notes to Financial Statements

2. Financial Statement Schedule

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

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

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


3. Exhibits

3.1 Affidavit and Certificate of Limited Partnership of CNL Income
Fund XIII, Ltd. (Included as Exhibit 3.2 to Registration
Statement No. 33-53672-01 on Form S-11 and incorporated herein
by reference.)

4.1 Affidavit and Certificate of Limited Partnership of CNL Income
Fund XIII, Ltd. (Included as Exhibit 3.2 to Registration
Statement No. 33-53672-01 on Form S-11 and incorporated herein
by reference.)

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

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

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

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

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

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

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

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

(b) The Registrant filed no reports on Form 8-K during the period October
1, 2002 through December 31, 2002.


SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on the 24th day of
March, 2003.


CNL INCOME FUND XIII, LTD.

By: CNL REALTY CORPORATION
General Partner

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


By: ROBERT A. BOURNE
General Partner

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


By: JAMES M. SENEFF, JR.
General Partner

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

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.



Signature Title Date


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




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




CERTIFICATION OF CHIEF EXECUTIVE OFFICER
OF CORPORATE GENERAL PARTNER

PURSUANT TO RULE 13a-14 AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


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

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

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

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

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

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

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

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

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

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

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

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

Date: March 24, 2003


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

CERTIFICATION OF CHIEF FINANCIAL OFFICER
OF CORPORATE GENERAL PARTNER

PURSUANT TO RULE 13a-14 AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

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

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

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

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

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

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

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

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

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

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

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

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


Date: March 24, 2003


/s/ Robert A. Bourne
- ---------------------
Robert A. Bourne
President and Treasurer


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

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2002





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

Properties the Partnership
has Invested in Under
Operating Leases:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Properties the Partnership has
Invested in Under Direct
Financing Leases

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

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

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

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

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


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

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

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




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






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


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


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


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



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


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


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


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


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


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



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

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








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







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







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







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







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







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






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


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


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


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


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


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







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







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

NOTES TO SCHEDUE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2002

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



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


Properties the Partnership has invested in Under Operating
Leases:

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

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

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

Balance, December 31, 2002 $ 24,386,517 $ 3,337,816
================== ===================

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

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

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

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

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



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

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

December 31, 2002




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

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

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

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

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

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

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

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

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





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

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

December 31, 2002




Cost Accumulated
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, 1999 (h) $ 872,625 $ 50,456
Depreciation expense -- 17,235
---------------- ------------------

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

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

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


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

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

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

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

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



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

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

December 31, 2002




Cost Accumulated
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
Reimbursement of construction costs (m) (67,559 ) (1,694 )
Depreciation expense -- 43,250
---------------- ------------------

Balance, December 31, 2002 $ 2,084,404 75,678
================ ==================


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

(c) As of December 31, 2002, the aggregate cost of the Properties owned by
the Partnership and joint ventures (including the Properties owned as
tenants-in-common) for federal income tax purposes was $31,225,186 and
$6,852,267, respectively. All of the leases are treated as operating
leases for federal income tax purposes.

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

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

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

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

(h) During the year ended December 31, 1997, the Partnership and an
affiliate as tenants-in-common, purchased a real estate property from
CNL BB Corp., an affiliate of the General Partners, for an aggregate
cost of $872,625.

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

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

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

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

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

December 31, 2002



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

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

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

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


EXHIBIT INDEX

Exhibit Number


(a) Exhibits

3.1 Affidavit and Certificate of Limited Partnership of CNL
Income Fund XIII, Ltd. (Included as Exhibit 3.2 to
Registration Statement No. 33-53672-01 on Form S-11 and
incorporated herein by reference.)

4.1 Affidavit and Certificate of Limited Partnership of CNL
Income Fund XIII, Ltd. (Included as Exhibit 3.2 to
Registration Statement No. 33-53672-01 on Form S-11 and
incorporated herein by reference.)

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

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

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

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

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

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

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

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

EXHIBIT 99.1


EXHIBIT 99.2