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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q



(Mark One)

[x] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934

For the quarterly period ended March 31, 2003

OR

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

For the transition period from ____________ to______________

Commission file number 001-15581

CNL AMERICAN PROPERTIES FUND, INC.
(Exact name of registrant as specified in its charter)

Maryland 59-3239115
(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

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 checkmark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act). Yes X No___

45,248,670 shares of common stock, $0.01 par value, outstanding as of
May 13, 2003.








CONTENTS





Part I Page
----

Item 1. Financial Statements:

Condensed Consolidated Balance Sheets 1

Condensed Consolidated Statements of Operations 2

Condensed Consolidated Statements of
Stockholders' Equity and Comprehensive
Income/(Loss) 3

Condensed Consolidated Statements of Cash Flows 4-5

Notes to Condensed Consolidated Financial
Statements 6-12

Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 13-26

Item 3. Quantitative and Qualitative Disclosures About
Market Risk 26

Item 4. Controls and Procedures 27

Part II

Other Information 28-31








Item 1. Financial Statements.

CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands except for per share data)



March 31, December 31,
2003 2002
----------------- -----------------


ASSETS

Real estate investment properties $ 570,824 $ 576,011
Net investment in direct financing leases 111,618 112,441
Real estate held for sale 126,704 149,034
Mortgage loans held for sale 40,462 48,568
Mortgage, equipment and other notes receivable, net of allowance of 330,480 334,467
$11,326 and $11,341, respectively
Other investments 31,909 32,163
Cash and cash equivalents 19,964 15,531
Restricted cash 4,007 4,574
Receivables, less allowance for doubtful accounts
of $1,658 and $1,182, respectively 3,398 3,281
Accrued rental income 23,742 22,293
Goodwill 56,260 56,260
Other assets 32,497 29,675
----------------- -----------------
$ 1,351,865 $ 1,384,298
================= =================

LIABILITIES AND STOCKHOLDERS' EQUITY

Revolver $ 12,500 $ 14,000
Note payable 197,944 203,207
Mortgage warehouse facilities 126,564 145,758
Subordinated note payable 43,750 43,750
Bonds payable 420,607 424,508
Due to related parties 10,546 5,124
Other payables 37,582 35,378
----------------- -----------------
Total liabilities 849,493 871,725
----------------- -----------------
Minority interests, including redeemable partnership interest 6,817 18,422
----------------- -----------------

Stockholders' equity:
Preferred stock, without par value. Authorized and unissued
3,000,000 shares -- --
Excess shares, $0.01 par value per share. Authorized and
unissued 78,000,000 shares -- --
Common stock, $0.01 par value per share. Authorized
62,500,000 shares, issued 45,285,972 shares, outstanding
45,248,670 shares 452 452
Capital in excess of par value 828,117 816,745
Accumulated other comprehensive loss (17,598 ) (16,862 )
Accumulated distributions in excess of net earnings (315,416 ) (306,184 )
----------------- -----------------
Total stockholders' equity 495,555 494,151
----------------- -----------------
$ 1,351,865 $ 1,384,298
================= =================



See accompanying notes to condensed consolidated financial statements.




CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands except for per share data)



Quarter Ended
March 31,
2003 2002
---------------- --------------


Revenues:
Sale of real estate $ 2,330 $ 37,233
Rental income from operating leases 15,818 19,820
Earned income from direct financing leases 2,736 2,985
Interest income from mortgage, equipment and other notes receivable 8,183 9,389
Investment and interest income 1,103 1,028
Other income 3,524 3,118
Net decrease in value of mortgage loans held for sale, net of related hedge (2,047 ) (3,221 )
---------------- --------------
31,647 70,352
---------------- --------------
Expenses:
Cost of real estate sold 2,146 34,336
General operating and administrative 8,648 7,553
Interest expense 12,607 15,680
Property expenses 207 1,925
State and other taxes 455 187
Depreciation and amortization 3,341 3,375
Provision for loss on loans 360 60
Impairment provisions 2,635 654
---------------- --------------
30,399 63,770
---------------- --------------

Earnings before minority interest in (income)/loss of consolidated joint
ventures, equity in earnings of unconsolidated joint ventures, and loss on 1,248 6,582
sale of assets

Minority interest in income of consolidated joint ventures (150 ) (135 )

Equity in earnings of unconsolidated joint ventures 612 268

Loss on sale of assets (6 ) (157 )
---------------- --------------
Earnings from continuing operations 1,704 6,558
---------------- --------------
Discontinued operations
Earnings (loss) from discontinued operations, net 1,158 (46 )
Gain (loss) on disposal of discontinued operations, net 5,157 (80 )
---------------- --------------
6,315 (126 )
---------------- --------------
Net Income $ 8,019 $ 6,432
================ ==============

Earnings per share of common stock (basic and diluted):
From continuing operations $ 0.04 $ 0.15
From discontinued operations 0.14 --
---------------- --------------
Net income $ 0.18 $ 0.15
================ ==============
Weighted average number of shares of common stock outstanding 45,248,670 44,075,641
================ ==============

See accompanying notes to condensed consolidated financial statements.





CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS'
EQUITY AND COMPREHENSIVE INCOME/(LOSS)
Quarter Ended March 31, 2003 and Year Ended December 31, 2002
(In Thousands except for share data and per share data)



Accumulated
distributions Accumulated
Common stock Capital in in excess other
Number Par excess of of net comprehensive Comprehensive
of shares value par value earnings Income/(loss) Total Income/(loss)
----------- ---------- ------------- -------------- --------------- --------- ---------------


Balance at December 31, 2001 44,075,641 $ 441 $ 798,154 $ (273,783 ) $ 1,370 $ 526,182

Shares issued 1,173,354 11 20,088 -- -- 20,099

Retirement of common stock (325 ) -- (4 ) -- -- (4 )

Stock issuance costs -- -- (1,493 ) -- -- (1,493 )

Net income -- -- -- 35,590 -- 35,590 $ 35,590

Other comprehensive loss,
market revaluation on
available for sale -- -- -- -- (775 ) (775 ) (775 )
securities

Current period adjustment to
recognize change in fair
value of cash flow hedges,
net of tax -- -- -- -- (17,457 ) (17,457 ) (17,457 )
------------

Total comprehensive income -- -- -- -- -- -- $ 17,358
============

Distributions declared and
paid ($1.52 per share) -- -- -- (67,991 ) -- (67,991 )
----------- ---------- ------------- -------------- ------------- ------------

Balance at December 31, 2002 45,248,670 $ 452 $ 816,745 $ (306,184 ) $ (16,862 ) $ 494,151

Acquisition of minority
interest -- -- 11,372 -- -- 11,372

Net income -- -- -- 8,019 -- 8,019 $ 8,019

Current period adjustment to
recognize change in fair
value of cash flow hedges,
net of tax -- -- -- -- (736 ) (736 ) (736 )
------------

Total comprehensive income -- -- -- -- -- -- $ 7,283
============

Distributions declared and
paid ($0.38 per share) -- -- -- (17,251 ) -- (17,251 )

----------- ---------- ------------- -------------- ------------- ------------

Balance at March 31, 2003 45,248,670 $ 452 $ 828,117 $ (315,416 ) $ (17,598 ) $ 495,555
=========== ========== ============= ============== ============= ============


See accompanying notes to condensed consolidated financial statements.





CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)


Quarter Ended
March 31,
2003 2002
------------------ -----------------


Cash flows from operating activities:
Net income $ 8,019 $ 6,432
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 3,347 4,057
Impairment provisions 3,861 1,212
(Gain) loss on sale of assets (260 ) 237
Provision for loss on loans 360 --
Investments in mortgage loans held for sale (493 ) (215 )
Collection on mortgage loans held for sale 7,587 8,981
Change in inventories of real estate held for sale 16,718 16,487
Changes in other operating assets and liabilities 281 (721 )
------------------ -----------------
Net cash provided by operating activities 39,420 36,470
------------------ -----------------

Cash flows from investing activities:
Additions to real estate investment properties -- (102 )
Proceeds from sale of assets 5,000 2,785
Decrease in restricted cash 567 2,460
Investment in joint ventures (640 ) (70 )
Investment in mortgage, equipment and other notes
receivable -- (2,058 )
Collections on mortgage, equipment and other notes
receivable 2,758 864
------------------ -----------------
Net cash provided by investing activities 7,685 3,879
------------------ -----------------

Cash flows from financing activities:
Payment of stock issuance costs -- (1,494 )
Proceeds from borrowing on revolver, note payable and
subordinated note payable 11,500 11,000
Payment on revolver, note payable and subordinated
note payable (18,263 ) --
Proceeds from borrowing on mortgage warehouse facilities 25,721 16,899
Payments on mortgage warehouse facilities (44,915 ) (52,280 )
Retirement of bonds payable (3,901 ) (3,641 )
Refund of loan costs -- 28
Loan from stockholder 4,500 7,500
Distributions to minority interests (63 ) (63 )
Distributions to stockholders (17,251 ) (16,803 )
------------------ -----------------
Net cash used in financing activities (42,672 ) (38,854 )
------------------ -----------------

Net increase in cash and cash equivalents 4,433 1,495

Cash and cash equivalents at beginning of quarter 15,531 19,333
------------------ -----------------
Cash and cash equivalents at end of quarter $ 19,964 $ 20,828
================== =================

See accompanying notes to condensed consolidated financial statements.



CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(In Thousands)


Quarter Ended
March 31,
2003 2002
------------------- ------------------


Supplemental disclosure of cash flow information:

Interest paid $ 12,466 $ 14,784
=================== ==================
Interest capitalized $ 19 $ --
=================== ==================

See accompanying notes to condensed consolidated financial statements.








CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Quarters Ended March 31, 2003 and 2002


1. Organization and Nature of Business:
-----------------------------------

CNL American Properties Fund, Inc. was organized in Maryland in May of
1994, and is a self-administered real estate investment trust ("REIT").
The term "Company" includes, unless the context otherwise requires, CNL
American Properties Fund, Inc. and its majority owned and controlled
subsidiaries. These subsidiaries include CNL Restaurant Properties,
Inc. ("CNL-RP") and CNL Franchise Network Corp. ("CNL-FNC"). The
Company's operations are divided into two business segments, real
estate and specialty finance. The real estate segment, operated
principally through the Company's wholly owned subsidiary CNL-RP and
its subsidiaries, is charged with overseeing and maximizing value on a
portfolio of primarily long-term triple-net lease properties. Those
responsibilities related to the real estate segment include portfolio
management, property management and dispositions. In addition, CNL-RP
manages approximately $550 million in affiliate portfolios and earns
management fees related thereto. The specialty finance segment,
operated through the Company's wholly-owned subsidiary CNL-FNC and a
partnership with Bank of America, CNL Franchise Network, LP ("CNL-FN")
and its subsidiaries, delivers financial solutions in the forms of
financing, servicing, development and advisory services to national and
regional restaurant operators.

Effective January 1, 2003, CNL-FN modified certain terms relating to
the alliance with Bank of America allowing the bank to assume certain
costs of its portfolio operations, decreasing the referral fees paid by
the bank and decreasing the bank's ownership in the alliance
accordingly. In addition, CNL CAS/Corp. an affiliate of the Company's
chairman, agreed to reduce its interest in the alliance. As a result,
the Company's effective ownership interest in CNL-FN increased from
84.39% to 96.26%. The Company reduced the minority interest and
increased stockholder's equity by approximately $11.4 million to
reflect this change in ownership.

2. Basis of Presentation:
---------------------

The accompanying unaudited condensed financial statements have been
prepared in accordance with the instructions to Form 10-Q and do not
include all of the information and note disclosures required by
generally accepted accounting principles. The financial statements
reflect all adjustments consisting of normal recurring adjustments
which, in the opinion of management, are necessary to a fair statement
of the results for the interim periods presented. Operating results for
the quarter ended March 31, 2003 may not be indicative of the results
that may be expected for the year ending December 31, 2003. Amounts as
of December 31, 2002, included in the financial statements, have been
derived from audited financial statements as of that date. These
unaudited financial statements should be read in conjunction with the
financial statements and notes thereto included in the Company's Form
10-K for the year ended December 31, 2002. Certain items in the prior
year's financial statements have been reclassified to conform with the
2003 presentation. These reclassifications had no effect on
stockholders' equity or net income.

3. Adoption of New Accounting Standards:
------------------------------------

In November 2002, FASB issued FASB Interpretation No. 45 ("FIN 45"),
"Guarantor's Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others". FIN 45
clarifies the requirements relating to a guarantor's accounting for,
and disclosure of, the issuance of certain types of guarantees. FIN 45
requires that upon issuance of a guarantee, the guarantor must
recognize a liability for the fair value of the obligation it assumes
under that guarantee. FIN 45's provisions for initial recognition and
measurement are to be applied on a prospective basis to guarantees
issued or modified after December 31, 2002. The Company's previous
accounting for guarantees issued prior to




CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Quarters Ended March 31, 2003 and 2002


3. Adoption of New Accounting Standards - Continued:
------------------------------------------------

January 1, 2003 are not required to be revised or restated to reflect
the effect of the recognition and measurement provisions of FIN 45. The
Company has not issued or modified any guarantees since the adoption of
FIN 45.

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. FIN 46 requires that a variable interest
entity be consolidated by a company if that company is subject to a
majority risk of loss from the variable interest entity's activities or
entitled to receive a majority of the entity's residual returns or
both. Prior to FIN 46, a company generally included another entity in
its consolidated financial statements only if it controlled the entity
through voting interests. Consolidation of variable interest 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 that adoption of this standard will not
change the accounting for its bankruptcy remote securitization
entities. Management believes that adoption of this standard may result
in either consolidation or additional disclosure requirements with
respect to the Company's unconsolidated subsidiaries, however, such
consolidation is not expected to significantly impact the Company's
financial position or results of operations.

4. Real estate investment properties:
---------------------------------

In 2003 and 2002, the Company recorded provisions for impairment of
$2.6 million and $.7 million respectively. The tenants of these
properties experienced financial difficulties and/or ceased payments of
rents under the terms of their lease agreements. The provisions
represent the amount necessary to reduce the carrying value to net
realizable value of the properties at March 31, 2003 and 2002.

5. Real estate held for sale:
--------------------------

Real estate held for sale consisted of the following at March 31, 2003
and December 31, 2002:


(In Thousands)
2003 2002
----------------- -------------------


Land and buildings $ 126,704 $ 149,034
================= ===================



The Company's specialty finance business segment actively acquires real
estate assets subject to leases with the intent to sell or securitize
them. Assets acquired after December 31, 2001 are subject to FAS 144,
and the operating results and gains or losses are recorded as
discontinued operations.

The Company's real estate investment subsidiary, CNL-RP, will divest
properties from time to time when such action is strategic to its
longer-term goals. When CNL-RP establishes its intent to sell a
property, all operating results and the ultimate gain or loss are
treated as discontinued operations for all periods presented. These
statements reflect certain reclassifications of rental related income,
interest expense and other categories so as to conform with the
requirements of FAS 144.





CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Quarters Ended March 31, 2003 and 2002


5. Real estate held for sale - Continued:
--------------------------------------

The operating results of the discontinued operations were as follows
for the quarters ended:


March 31,
(In Thousands) 2003 2002
----------------- -----------------


Rental income $ 3,120 $ 1,662
Interest expense (613 ) (38 )
Impairment provisions (1,226 ) (558 )
Other expenses (123 ) (1,112 )
----------------- -----------------
Income (loss) from discontinued
operations, net 1,158 (46 )
----------------- -----------------
Sales of real estate 50,161 1,919
Cost of real estate sold (45,004 ) (1,999 )
----------------- -----------------
Gain (loss) on disposal of
discontinued operations, net 5,157 (80 )
----------------- -----------------
Income (loss) from discontinued
operations, net $ 6,315 $ (126 )
================= =================


6. Borrowing:
---------

The Company's $125 million warehouse facility was scheduled to expire
on March 25, 2003, but was extended until early June 2003. Management
expects the facility will be renewed until June of 2004.

7. Related Party Transactions:
--------------------------

During the quarter ended March 31, 2003, CNL Financial Group, Inc., an
affiliate, advanced approximately $4.5 million to the Company in the
form of a demand balloon promissory note. The note is uncollateralized,
bears interest at LIBOR plus 2.5 percent with interest payments and
outstanding principal due upon demand. At March 31, 2003, $8.75 million
in loans are outstanding.








CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATEDFINANCIAL STATEMENTS
Quarters Ended March 31, 2003 and 2002


8. Segment Information:
-------------------

The Company has established CNL-RP and CNL-FNC as separate legal
entities to operate and measure the specialty finance and real estate
segments, respectively.

CNL-RP is the parent company of CNL APF Partners LP, a real estate
company that oversees real estate, mortgage and equipment loans
generally until maturity. CNL-FNC is the parent of CNL Franchise
Network, LP, a specialty finance company focused on delivering
financial solutions in the forms of financing, servicing, advisory and
other services to restaurant operators. CNL-FNC delivers these
solutions primarily by acquiring restaurant real estate properties
which have been subject to a triple-net lease, utilizing short-term
debt and selling such properties at a profit generally within one year.

The following table summarizes the results for the quarters ended March
31, 2003 and 2002 with segment information for the two lines of
business. Consolidating eliminations and other results of the parent of
CNL-RP and CNL-FNC are reflected in the "other" column.


Quarter Ended March 31, 2003
(In Thousands)

Consolidated
CNL-RP CNL-FNC Other Totals
--------------- ----------------- -------------- ----------------


Revenues $ 22,704 $ 9,396 $ (453 ) $ 31,647
--------------- ----------------- -------------- ----------------

Cost of real estate sold -- 2,146 -- 2,146
General operating and administrative 3,919 5,006 (277 ) 8,648
Interest expense 6,948 5,789 (130 ) 12,607
Property expenses, state and other
taxes 269 393 -- 662
Depreciation and amortization 3,032 309 -- 3,341
Provision for loss on loans -- 360 -- 360
Impairment provisions 2,635 -- -- 2,635
Loss on sale of assets 2 4 -- 6
Minority interest and equity in
earnings 164 (626 ) -- (462 )
--------------- ----------------- -------------- ----------------
16,969 13,381 (407 ) 29,943
--------------- ----------------- -------------- ----------------
Discontinued operations:
Earnings/(loss) from discontinued
operations, net (339 ) 1,497 -- 1,158
Gain on disposal of discontinued
operations, net 266 4,891 -- 5,157
--------------- ----------------- -------------- ----------------
(73 ) 6,388 -- 6,315
--------------- ----------------- -------------- ----------------

Net income/(loss) $ 5,662 $ 2,403 $ (46 ) $ 8,019
=============== ================= ============== ================

Assets at March 31, 2003 $ 822,205 $ 533,604 $ (3,944 ) $ 1,351,865
=============== ================= ============== ================
Investments accounted for under the
equity method at March 31, 2003 $ 1,661 $ 738 $ -- $ 2,399
=============== ================= ============== ================






CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Quarters Ended March 31, 2003 and 2002



8. Segment Information - Continued:
-------------------------------

Quarter Ended March 31, 2002
(In Thousands)

Consolidated
CNL-RP CNL-FNC Other Totals
---------------- ----------------- -------------- ----------------


Revenues $ 22,269 $ 48,552 $ (469 ) $ 70,352
---------------- ----------------- -------------- ----------------

Cost of real estate sold -- 34,336 -- 34,336
General operating and administrative 2,629 5,135 (211 ) 7,553
Interest expense 8,387 7,482 (189 ) 15,680
Property expenses, state and other
taxes 2,033 79 -- 2,112
Depreciation and amortization 3,095 309 (29 ) 3,375
Provision for loss on loans -- 60 -- 60
Impairment provisions 27 627 -- 654
Loss (gain) on sale of assets 158 (1 ) -- 157
Minority interest and equity in
earnings 33 (166 ) -- (133 )
---------------- ----------------- -------------- ----------------
16,362 47,861 (429 ) 63,794
---------------- ----------------- -------------- ----------------
Discontinued operations:
Earnings/(loss) from discontinued
operations, net (107 ) 61 -- (46 )
Loss on disposal of discontinued
operations, net (80 ) -- -- (80 )
---------------- ----------------- -------------- ----------------
(187 ) 61 -- (126 )
---------------- ----------------- -------------- ----------------
Net income/(loss) $ 5,720 $ 752 $ (40 ) $ 6,432
================ ================= ============== ================
Assets at March 31, 2002 $ 916,368 $ 607,422 $ (3,937 ) $ 1,519,853
================ ================= ============== ================

Investments accounted for under the
equity method at March 31, 2002 $ 1,055 $ 243 $ -- $ 1,298
================ ================= ============== ================


9. Income Tax:
-----------

The Company elected to be taxed as a REIT under the Internal Revenue
Code. To qualify as a REIT, the Company must meet a number of
organizational and operational requirements, including a current
requirement that it distribute at least 90 percent of its taxable
income to its stockholders. As a REIT the Company generally will not be
subject to corporate level federal income tax on net income it
distributes to its stockholders, except taxes applicable to its taxable
REIT subsidiaries ("TRSs") as described below. This benefit allows
earnings from a REIT to avoid the typical double taxation applicable to
most corporations. If the Company fails to qualify as a REIT in any
taxable year, it will be subject to federal income taxes at regular
corporate rates (including any alternative minimum tax) and may not be
able to qualify as a REIT for four subsequent tax years. Even if the
Company qualifies for taxation as a REIT, the Company may be subject to
state and local taxes on its income and property, and to federal income
and excise taxes on its undistributed taxable income.





CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Quarters Ended March 31, 2003 and 2002


9. Income Tax - Continued:
-----------------------

Stockholder distributions that are characterized as return of capital
are generally non-taxable to the stockholder and the amount reduces the
stockholder's basis in Company stock. Since distributions commenced in
1995, a portion of each year's distribution has been characterized as a
return of capital. To illustrate, a stockholder's tax basis in a share
of stock purchased in 1995 would have been reduced by approximately
$4.42 in aggregate amounts of return of capital through December 31,
2002. Each stockholder must maintain records of the purchase price,
distributions received, and the applicable tax treatment of such
distributions in order to determine the gain or loss upon sale of
Company stock.

For income tax purposes the Company has two TRSs in which activities of
the specialty finance segment and select activities of the real estate
segment are conducted. Prior to January 1, 2001, these subsidiaries
were not subject to federal income tax.

Loan valuation adjustments, loss reserves, loan fees, and depreciation,
among other items, are treated differently for tax than for financial
reporting purposes. In the aggregate, the Company's TRSs have an excess
of available future deductible items over future taxable items and as
such may more fully benefit from these items when the related
subsidiaries produce a greater level of taxable income. The
subsidiaries involved do not have sufficient historical earnings on
which to expect a full potential future benefit of these future
deductions. Therefore the Company has recorded an allowance against a
portion of the deferred tax asset associated with the future deductible
items.

The consolidated provision for federal income taxes differs from the
amount computed by applying the statutory federal income tax rate to
the earnings of the CNL-FNC segment and the earnings of the real estate
segment TRS as follows:


Three Months Ending March 31,
--------------------------------------------------------------------
2003 2002
------------------------------- ------------------------------
Amount Amount
(In Thousands) Rate (In Thousands) Rate
------------------ ------ ----------------- ---------


Expected tax at US statutory rate $ 941 34% $ 199 34%
Adjustments:
Unconsolidated affiliates 432 15 390 67
Other (12 ) -- 65 11
Change in valuation allowances (1,361 ) (49 ) (654 ) (112 )
------------------ --------- ----------------- ---------
Provision for income taxes $ -- -- % $ -- --%
================== ========= ================= =========







CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Quarters Ended March 31, 2003 and 2002


9. Income Tax - Continued:
-----------------------

The components of the net deferred tax asset are as follows at:


(In Thousands)
March 31, December 31,
2003 2002
------------------- ------------------


Deferred tax asset:
Cash flow hedge related difference $ 5,658 $ 5,789
Loan valuation and related hedge differences 2,534 1,899
Loan origination fees 612 619
Real estate loss reserves 518 300
Reserve for investment losses 839 736
Net operating losses 332 250
Other 109 (19 )
------------------- ------------------
Total 10,602 9,574
Valuation allowance (6,608 ) (7,846)
------------------- ------------------
Net recorded deferred tax asset $ 3,994 $ 1,728
=================== ==================

The income tax provision consists of the following components:

Three Months Ending March 31,
(In Thousands)
2003 2002*
--------------- ---------------
Current:
Federal $ 1,951 $ --
State 316 --
--------------- ---------------
2,267 --
--------------- ---------------
Deferred:
Federal (1,951 ) --
State (316 ) --
--------------- ---------------
(2,267 ) --
--------------- ---------------
Total Provision $ -- $ --
=============== ===============



* The TRS returns filed for the year ended December 31, 2001 reflected
a net operating loss and through March 31, 2002 no current taxes were
payable. For reasons stated above, there was no tax benefit recorded
for the loss or for other future deductible items.




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

The following information, including, without limitation, the
Quantitative and Qualitative Disclosures About Market Risk that are not
historical facts, may be forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These statements generally are
characterized by the use of terms such as "believe," "expect" and
"may." Although the Company believes that the expectations reflected in
such forward-looking statements are based upon reasonable assumptions,
the Company's actual results could differ materially from those set
forth in the forward-looking statements. Factors that might cause such
a difference include: changes in general economic conditions, changes
in real estate conditions, availability of capital from borrowings
under the Company's credit facilities, the availability of other debt
and equity financing alternatives, changes in interest rates under the
Company's current credit facilities and under any additional variable
rate debt arrangements that the Company may enter into in the future,
the ability of the Company to refinance amounts outstanding under its
credit facilities at maturity on terms favorable to the Company, the
ability of the Company to locate suitable tenants for its restaurant
properties and borrowers for its mortgage loans, the ability of tenants
and borrowers to make payments under their respective leases, secured
equipment leases or mortgage loans, the ability of the Company to
re-lease properties that are currently vacant or that become vacant and
the ability of the Company to securitize or sell mortgage loans or net
lease properties on a favorable and timely basis. Given these
uncertainties, readers are cautioned not to place undue reliance on
such statements.

Organization and Business

CNL American Properties Fund, Inc. ("CNL-APF" or the "Company") is the
nation's largest self-advised real estate investment trust ("REIT")
focused on the restaurant industry. The Company operates as a holding
company for two primary subsidiary operating companies, CNL Restaurant
Properties, Inc. and CNL Franchise Network Corp. The Company was
founded in 1994 and at March 31, 2003, has financial interests in
approximately 1,040 properties diversified among more than 125
restaurant concepts in 47 states. The Company's total real estate
holdings subject to lease includes over 650 properties, of which
approximately 125 properties are classified as held for sale. At March
31, 2003, the servicing portfolio of net lease properties and mortgages
includes approximately 2,250 units, of which over 1,200 are serviced on
behalf of third parties.

The Company operates two business segments - real estate, with a strong
capital base and stable cash flows, and specialty finance, a growth
business partnered with a large financial institution.

o The real estate segment, operated principally through the
Company's wholly owned subsidiary CNL Restaurant Properties, Inc.
("CNL-RP") and its subsidiaries, is charged with overseeing and
maximizing value on a portfolio of primarily long-term triple-net
lease properties. Those responsibilities include portfolio
management, property management and dispositions. In addition,
CNL-RP manages approximately $550 million in affiliate portfolios
and earns management fees related thereto. More recently CNL-RP
has strengthened its ability to manage restaurant operations to
achieve optimal resolution to defaulted properties, as often the
value of the real estate is based on the uninterrupted success of
the restaurant itself. Management has viewed these additional
skills as offering the potential for expanded shareholder value
as other strategic opportunities are identified.

o The specialty finance segment, operated through the Company's
wholly-owned subsidiary CNL Franchise Network Corp. ("CNL-FNC")
partnered with Bank of America, CNL Franchise Network, LP
("CNL-FN") and its subsidiaries, delivers financial solutions in
the forms of financing, servicing, advisory and other services to
national and larger regional restaurant operators primarily by
acquiring restaurant real estate properties, which have been
subject to a triple-net lease, utilizing short-term debt and
selling such properties at a profit. CNL-FN recently modified
certain terms relating to the alliance with Bank of America
allowing the bank to assume certain costs of its portfolio
operations and decreasing the referral fees paid by the bank and
decreasing the bank's ownership interest in CNL-FN accordingly.
In addition, an affiliate of the Company's chairman agreed to
reduce its interest in CNL-FN. As a result, the Company's
effective interest in the specialty finance operations increased
from 84.390 percent to 96.258 percent.



Effective January 1, 2001, CNL-FNC elected to be treated as a taxable
REIT subsidiary ("TRS") pursuant to the provisions of the REIT
Modernization Act. As a TRS, CNL-FNC engages in activities that would
previously have caused income to the Company from CNL-FN to be
disqualified from being eligible REIT income under the federal income
tax rules. Now CNL-FN earnings are subject to tax, but management can
control the timing of distributions to the Company. CNL-FNC originates
triple-net lease properties for sale to third parties and, in some
cases, securitization. CNL-FNC also performs net lease and loan
servicing on behalf of third parties. Also, certain activities of
CNL-RP are conducted in a subsidiary that has made a similar TRS
election.

When the Company was created in 1994, the intent was to provide
stockholders liquidity by December 31, 2005 through either listing on a
national exchange, merging with another public company or liquidating
its assets. The Company's officers and directors continue to monitor
the public markets for opportunities and the Company's board does not
intend to liquidate the Company. To comply with certain tax guidelines
governing the significance of taxable REIT subsidiaries, the Company
may pursue other alternatives relative to CNL-FNC that would provide
stockholder liquidity for all or a portion of the Company's investment.

Liquidity and Capital Resources

The Company is a self advised real estate investment trust that
reflects the earnings of its two primary segment subsidiaries, CNL-RP
and CNL-FNC. The Company elected to reinvest the earnings of the
specialty finance business to date as contemplated by the agreement
with Bank of America. The Company will continue to reinvest earnings
into this subsidiary while it is in its current growth phase and
demonstrates the ability to generate higher returns. CNL-APF has
continued to declare and pay distributions to its stockholders that are
primarily funded by CNL-RP activities. The remainder of the
distribution was funded by sales of its common stock to the Company's
Chairman through a private company affiliate, CNL Financial Group, Inc.
("CNL Financial Group"), and loans from CNL Financial Group that the
Company expects to convert into its common stock.

The Company is pursuing a strategy built around CNL-RP's strong capital
base and stable cash flows coupled with CNL-FNC's specialty finance
growth business. The Company's ability to internally fund capital needs
is limited since it must distribute at least 90 percent of its net
taxable income (excluding net capital gains) to stockholders to qualify
as a REIT. In the three months ended March 31, 2003 and 2002 the
Company distributed $17.3 million and $16.8 million, respectively, or
$0.38125 per share, to its stockholders. For 2002, these distributions
constituted a return of capital for tax purposes and were generally not
taxable to the shareholders, but did reflect tax deductions associated
with impairments and loan loss reserves recorded in 2001 and
differences in non-cash charges including depreciation and
amortization. Taxable income in 2002 did not include any of CNL-FNC's
$12.6 million in annual earnings. Through December 31, 2002 the Company
has distributed approximately $4.17 per share of an investor's original
purchase price since December 31, 1995 as a non-taxable return of
capital for tax purposes. The taxability of the distribution made in
2003 will not be determined until January 2004, but is likely that a
portion will be considered a return of capital for income tax purposes.

In order to ensure that the Company maintains its historical level of
distributions to its stockholders, the Company's Chairman, through CNL
Financial Group, advanced to the Company $4.5 million during the three
months ended March 31, 2003. Throughout 2002, the Chairman received
1,173,354 shares of the Company's stock in exchange for $20.1 million
in cash, including the conversion of amounts previously treated as
advances. Similar stock purchases occurred in 2001. This provided
capital that allowed the Company to reinvest the earnings generated by
the specialty finance business. The number of shares were determined
using an estimated fair value per share of $17.13 as concluded in an
early 2002 valuation from a third party firm, which based its valuation
on an analysis of comparable publicly traded real estate investment
trusts and a discounted cash flow analysis. Also, the Chairman advanced
$4.2 million to the Company in December 2002. The Company's Chairman
was under no obligation to do so. Should the Company's Chairman
determine not to purchase additional shares or loan additional funds to
the Company, and the Company does not generate adequate cash flow from
other sources, the Company may have to reduce its distribution rate.

As described above, during the quarter ended March 31, 2003, CNL
Financial Group, an affiliate, advanced approximately $4.5 million to
the Company in the form of a demand balloon promissory note. The note
is uncollaterized, bears interest at LIBOR plus 2.5 percent with
interest payments and outstanding principal due upon demand. At March
31, 2003, $8.75 million in loans are outstanding.


The Company's management expects to continue meeting short-term and
long-term liquidity requirements through distributions from CNL-RP,
issuance of debt and sales of stock. To date CNL-FNC has reinvested its
earnings in ongoing operations. Management expects distributions from
CNL-FNC to begin within the next two years.

As a result, the Company may sell additional shares of its common stock
or borrow additional funds in order to satisfy future distribution
requirements. The Company's Chairman is under no obligation to purchase
additional shares of the Company's common stock or loan additional
funds to the Company in order to guarantee that the Company maintains
its historical distribution level to stockholders.

Selling additional shares of the Company's stock may dilute a
shareholder's investment, affecting its future value. However, selling
stock to enable CNL-FN to reinvest earnings may be accretive to the
extent that the value of the specialty finance segment increases. In
connection with maintaining its historical distribution level, the
Company may sell additional shares of its common stock to CNL Financial
Group or to additional third party purchasers. Such sales may reduce
the value a shareholder receives for his or her investment upon a
future liquidity event.

o Specialty Finance Segment (CNL Franchise Network Corporation)

CNL-FN originates triple-net leases, temporarily financing those assets
with warehouse credit facilities and periodically selling, refinancing
or securitizing those assets. CNL-FN generates income by earning a
spread on assets with a return greater than its cost of borrowings, and
by selling assets at gains. A triple-net lease is a long-term lease
with periodic rent increases that requires the tenant to pay expenses
on the property, insulating the Company from making significant cash
outflows for maintenance, repair, real estate taxes or insurance. In a
securitization, the Company sells or transfers a pool of loans or
properties with triple-net leases to a special purpose entity which, in
turn, issues to investors securities backed by an interest in the
revenue originating from the loans or triple-net leases. These
transactions generate cash that is used for additional acquisitions.

CNL-FN has the following borrowing sources as of March 31, 2003, with
the stated total capacity and average interest rate based on the
interest rates charged for the most recent three months:


In Thousands
Amount Used Capacity Maturity Average Rate
---------------- ------------- --------------- ----------------


Note payable (medium term financing) (1) $ 197,944 $ 197,944 Jun 2007 2.68%
Mortgage warehouse facilities (1) 126,564 385,000 Annual 2.52%
Subordinated note payable 43,750 43,750 Jun 2007 8.50%
Series 2001-4 bonds payable (2) 42,723 42,723 2009 - 2013 8.90%
Mirror liquidity facility -- 10,000 Oct 2003 N/A
---------------- -------------
$ 410,981 $ 679,417
================ =============



(1) average rate excludes the impact of hedge transactions that bring
the total average rate to 5.79 percent on the medium term financing
and 2.35 percent on financing the warehouse facilities.
(2) includes $4,698 in bonds held by CNL-RP eliminated upon
consolidation in Company financial statements.

The Company, through its alliance with Bank of America, originates
triple-net leases and refers portfolio loan financing. In forming the
alliance, the Company invested certain assets and operations into
CNL-FN and Bank of America provided CNL-FN with a $43.75 million
subordinated debt facility (the "Subordinated Debt Facility") and a
warehouse credit facility (the "Warehouse Credit Facility") with an
initial capacity of $500 million.

The securitization market experienced considerable volatility in late
2000 as a result of rising delinquencies in securitized loan pools,
falling treasury rates, macroeconomic uncertainties and sluggish
restaurant sales. Investors demanded higher interest rates on the
securities issued in securitizations while ratings agencies downgraded
the quality of the loans underlying the securities. While many of the
Company's competitors experienced downgrades or ratings actions on
bonds previously issued, the Company's prior loan and lease
securitizations to date have not been subject to any such ratings
action. In response to the market conditions, management used private
market sales channels to either refinance or sell existing mortgage
loans, and halted the origination of new loans.

Company warehouse borrowings were initially designed to provide interim
financing until periodic securitizations could occur. The instability
of this market led to renegotiated terms of the relationship with Bank
of America by October 2001, including having CNL-RP provide a $15
million guaranty until $187 million of loans held as collateral on the
Bank of America Warehouse Credit Facility were removed, with the
guaranty having since been reduced to $2 million and tied to the
removal of the last of the remaining loans. In addition, a second $15
million guaranty was tied to successfully achieving an earnings and
liquidity target within a required timeframe, and this second guaranty
has since been eliminated through the achievement of these targets.
Bank of America also extended a $10 million unsecured credit facility
to CNL-RP with CNL-RP then entering into a $10 million mirror credit
facility with CNL-FN. CNL-FN utilizes this mirror facility for working
capital as necessary to fund its equity in new properties substantially
financed on the mortgage warehouse facilities and to meet margin calls
on the mortgage warehouse facilities, but at March 31, 2003 no amounts
are outstanding on this facility. Bank of America agreed to finance the
remaining loans held as collateral on the Warehouse Credit Facility
until November 2003.

In June 2002, in order to repay warehouse financing, the Company
entered into a five-year term $207 million financing collateralized
with $225 million in mortgage loans re-designated to reflect the
Company's intention to hold them to maturity. This five-year term
financing carries a variable interest rate tied to the weighted average
rate of commercial paper plus 1.25 percent with a portion of such
interest fixed through the initiation of a hedge transaction. The
transaction provides CNL-FN ongoing earnings on the excess of interest
income over interest expense.

In 2001, CNL-FN introduced its program to sell investment properties to
third parties (the "Investment Property Sales" program) adding
diversity to its original securitization model. These leased properties
can be sold and may qualify the buyer for special tax treatment under
Section 1031 of the Internal Revenue Code (a "Section 1031 Exchange").
Generally, Section 1031 Exchanges allow an investor who realizes a gain
from selling appreciated real estate to defer paying taxes on such gain
by reinvesting the sales proceeds in like-kind real estate. In
addition, the Company formed a partnership with a third party client to
engage in a similar program. During the three months ended March 31,
2003 and 2002, CNL-FN has generated gains of $5.8 million and $3.1
million respectively. The success of this program is dependent upon
achieving an optimal balance of cash flows from lease income earned in
excess of holding costs versus a maximum gain on the sale. The chart
below illustrates cash flows from Investment Property Sales proceeds
and real estate originations for CNL-FN and the affiliated joint
venture in the comparative three-month periods:


(In Thousands)
Three Months Three Months
Ended March 31, Ended March 31,
2003 2002
------------------ -------------------


Proceeds from Investment Property Sales program sales $ 56,333 $ 42,326
================== ===================
Purchases of properties to be sold under the Investment
Property Sales program $ 22,421 $ 15,253
================== ===================



CNL-FN earnings depend on its continued origination and holding of new
real estate inventory in order to sustain the level of earnings and
sales achieved in the initial three months of 2003. By selling more
properties than are originated during a period, CNL-FN will have fewer
properties on which to earn income in a future period. At March 31,
2003, CNL-FN had $116.7 million in properties held for sale under this
program. Management expects continued strong demand for Investment
Property Sales assets by the investor community, but such demand could
diminish in the face of rising interest rates. Management continues to
investigate other sales channels in which to market net lease assets
and to monitor the securitization market for potential re-entry in the
future.

During the three months ended March 31, 2003, CNL-FNC derived its
primary cash flows from lease and interest income earned in excess of
interest expense paid ("net spread"), net gains from the Investment
Property Sales program and servicing revenues. Significant cash
outflows consist of operating expenses, real property purchases and
capital enhancements in the loan portfolio (excess of investment over
related borrowings). CNL-FN has taken steps to reduce its credit
capacity in its warehouse credit facilities. CNL-FN had a warehouse
credit capacity of $385 million at March 31, 2003. One of the Company's
warehouse credit facilities that was scheduled to expire on March 25,
2003 was extended until early June 2003. Management expects that the
facility will renew until June 2004. Management has and may continue to
decrease the mortgage warehouse facility capacity from its present
level in order to economize on its cost, provided that there continue
to be costs associated with excess capacity. CNL-FN may also be subject
to margin calls on its warehouse credit facilities. Bank of America and
the other third party lenders monitor asset securitization market
assumptions, assumptions on the Company's derivatives and delinquency
assumptions and actual delinquencies and based on changes in market
conditions, may require a margin call to reduce the level of warehouse
financing. During the three months ended March 31, 2003 CNL-FN was not
required to make a margin call; during the same period in 2002, CNL-FN
paid approximately $14 million in net margin calls on its warehouse
credit facilities. At March 31, 2003 CNL-FN has no amounts outstanding
on the $10 million mirror credit facility that matures in October 2003.

Management is contemplating strong demand for net lease financing in
2003, targeting $300 million in net lease originations for the year
ending December 31, 2003, and continues to view the triple-net lease
product as its core product offering to restaurant operators, but
continues to monitor the potential reemergence of a mortgage loan
product through developments on the securitization front. For the three
months ended March 31, 2003, CNL-FN originated $22.4 million in net
leases as compared with $15.3 million in the same period last year.
These originations provide inventory necessary to execute the
Investment Property Sales program and CNL-FN typically profits from the
leases while holding them. At March 31, 2003, CNL-FN was involved in
numerous opportunities for continued net lease originations with $47
million approved for funding and accepted and an additional $20 million
with executed commitment letters. Management believes that the demand
for new net lease fundings is stronger than these numbers suggest, but
that many would-be tenants are proceeding cautiously with expansion
plans in the face of geopolitical and macroeconomic conditions,
particularly with low interest rate debt alternatives. CNL-FN's
warehouse facilities provide advances for up to 97 percent of the real
estate purchase value. The Company is reinvesting its operating profits
to fund the amounts not advanced by the mortgage warehouse facilities.

At March 31, 2003, CNL-FN had approximately $74 million in capital
supporting its loan and lease portfolio. CNL-FN management maintains
regular contact with its mortgage warehouse facility lenders and
believes that the relatively low-cost, high-advance rate financing they
provide has been integral to CNL-FN's success. As is typical of
revolving debt facilities, these facilities carry a 364-day maturity
and CNL-FN is vulnerable to any changes in the terms of these
facilities. The warehouse facilities currently advance an average of
93.7 percent of the original real estate value. Management believes
that the advance rates could decline throughout the remainder of the
year. A five percent decrease in advance rates, for example, would
create a $6 million cash requirement for CNL-FN, based on the
outstanding net lease and loan volume in the warehouse credit
facilities at March 31, 2003. While management expects its mortgage
warehouse facilities to renew, any non-renewal would create an
immediate need to find alternate borrowing sources.

Additional liquidity risks include the possible occurrence of economic
events that could have a negative impact on the franchise asset-backed
securitization market and affect the quality or perception of the loans
or leases underlying CNL-FN's securitization transactions. The Company
conducted its previous securitizations using bankruptcy remote
entities. These entities exist independent from the Company and their
assets are not available to satisfy the claims of creditors of the
Company, any subsidiary or its affiliates. To date, the ratings on the
loans underlying the securities issued in these transactions have been
affirmed unlike the ratings of many competitors' pools that have been
downgraded. Upon the occurrence of a significant amount of
delinquencies and/or defaults, one or more of the three rating agencies
may choose to place a specific transaction on ratings watch or even
downgrade one or more classes of securities to a lower rating. Should
the loans underlying the securities default, and the securities undergo
a negative ratings action, CNL-FN could experience material adverse
consequences impacting its ability to continue earning income as
servicer and its ability to engage in future profitable securitization
transactions. To potentially avoid those consequences, CNL-FN could
choose to contribute capital to serve as additional collateral
supporting one or more of the bankruptcy remote entities used to
facilitate a securitization. CNL-FN holds an interest in the following
securitizations, the assets and liabilities of which are not
consolidated in the Company financial statements:






March 31, 2003
------------------------------------------
(In Thousands)
Mortgage loans in Bonds outstanding
pool at par at face value
-------------------- ---------------------



Loans and debt supporting 1998-1 Certificates issued by CNL
Funding 1998-1, LP $ 205,455 $ 203,431
Loans and debt supporting 1999-1 Certificates issued by CNL
Funding 1999-1, LP 235,669 235,669
-------------------- ---------------------
$ 441,124 $ 439,100
==================== =====================


Note: Certain bonds in both the 1998-1 and 1999-1 pools are owned by
CNL-RP and CNL-FN and appear as investments in the consolidated
financial statements of the Company.

Liquidity risk also exists from the possibility of borrower
delinquencies on the mortgage loans held for sale or held to maturity.
In the event of a borrower delinquency, the Company could suffer not
only shortfalls on scheduled payments but also margin calls by the
lenders that provide the warehouse facilities and the five-year note,
subjecting the Company to unanticipated cash outflows. The Company is
obligated under the provisions of its mortgage warehouse facilities and
its five-year refinancing to pay down certain debt associated with
borrower delinquencies or defaults within a required time frame. Most
properties acquired on the mortgage warehouse facilities are required
to be sold within a certain time frame. Any delinquency, default or
delay in the resale of properties financed through one of these
facilities would generally result in an immediate pay-down of the
related debt and may restrict the Company's ability to find alternative
financing. The Company's debt, excluding bonds payable, generally
provides for cross-default triggers. A default of a mortgage warehouse
facility, for example from a failure to make a margin call, could
result in many of the Company's borrowings becoming immediately due and
payable.

CNL-FN has developed a successful Investment Property Sales program, in
part because some buyers of CNL-FN's properties are motivated to defer
the taxation of gains on other properties they have sold. In recent
years, the taxation of capital gains has become an issue spurring
extensive political debate. Proposed legislation regularly surfaces
that would eliminate the taxation of capital gains. This potential
change could be either negative or positive to the Company. Any such
proposal, even if ultimately unsuccessful, could cause buyers of CNL-FN
properties to delay sales of their own investment properties that, in
turn, would delay their purchase of CNL-FN properties. A successful
proposal could limit the opportunities to continue the existing CNL-FN
Investment Property Sales program. However it is also possible that
unfettered by a capital gains tax and the constraints of a Section 1031
Exchange, more investors will seek out investment properties for the
merits of the investment itself.

Net lease properties acquired in anticipation of sales through the
Investment Property Sales program can typically be leased to tenants at
a rate that exceeds the rate a Section 1031 Exchange or other buyer is
willing to accept. An increase in general levels of interest rates
could result in buyers requiring a higher yield that would reduce the
gain on the sale of existing properties. Neither the rate of return on
leased properties nor the rate of return required by a buyer correlate
directly with prevailing interest rates. CNL-FN is therefore at risk
that any interest rate increases causing buyers to demand higher yields
may not be matched with higher yields from tenants. This risk could
cause CNL-FN to experience lower average gains on the future sales of
Investment Property Sales properties.

In summary, the Company's specialty finance segment expects to meet its
liquidity requirements in 2003 with a combination of cash from
operating activities, including cash from its Investment Property Sales
program and borrowings on its warehouse credit facilities or its mirror
credit facility. CNL-FN renews its warehouse credit facilities annually
and to date has been successful in doing so at substantially comparable
terms. CNL-FN's longer-term liquidity requirements (beyond one year)
are expected to be met through successful renewal of its warehouse
credit facilities and the mirror credit facility, successful execution
of the Company's Investment Property Sales program, portfolio debt
origination fees, asset securitizations, and augmented by operating
cash flows provided by servicing and advisory services. In addition,
CNL-FN may seek to obtain additional debt or equity financing. Any
decision to pursue additional debt or equity capital will depend on a
number of factors, such as compliance with the terms of existing credit
agreements, the Company's financial performance, industry or market
trends and the general availability of attractive financing
transactions. However, there can be no assurance that future expansion
will be successful due to competitive, regulatory, market, economic and
other factors.

o Real Estate Segment (CNL Restaurant Properties, Inc.)

CNL-RP operates as a real estate company and its cash flows primarily
consist of rental income from tenants on restaurant properties owned,
interest income on mortgage loans, dispositions of properties and
income from holding interests in prior loan securitizations. CNL-RP's
cash outflows are predominantly interest expense, operating expenses,
reinvestment of disposition proceeds and distributions to CNL-APF.
Borrowing resources at March 31, 2003 for CNL-RP include:



(In Thousands)
Amount Used Capacity Maturity Average Rate
--------------- -------------- -------------- ---------------


Revolver $ 12,500 $ 30,000 Oct 2003 3.62%
Series 2000-A bonds payable 259,461 259,461 2009 - 2017 7.94%
Series 2001 bonds payable 123,121 123,121 Oct 2006 1.84%
--------------- --------------
$ 395,082 $ 412,582
=============== ==============


CNL-RP provides a guaranty of $2 million of CNL-FN's mortgage warehouse
facility debt and also provides a guaranty up to ten percent of
CNL-FN's five year term financing.

CNL-RP's short-term debt consists of the $30 million revolving line of
credit (the "Revolver") entered into in October 2001. The Company
utilizes the Revolver from time to time to manage the timing of inflows
and outflows of cash from operating activities. The Company's Revolver
is a two-year facility, maturing in October 2003, and includes a
one-year renewal option. At March 31, 2003, the Revolver had an
outstanding balance of $12.5 million.

CNL-RP also had medium-term and long-term bond financing. Rental income
received on the 379 properties pledged as collateral on medium and
long-term financing is used to make scheduled reductions in bond
principal and interest.

Liquidity risks within the real estate business include the potential
that a tenant's financial condition could deteriorate, rendering it
unable to make its rent payments and thereby reducing CNL-RP's income
and cash flows. Generally, CNL-RP uses a triple-net lease to lease its
properties to its tenants. The triple-net lease is a long-term lease
with periodic rent increases and requires the tenant to pay expenses on
the property. The lease somewhat insulates CNL-RP from significant cash
outflows for maintenance, repair, real estate taxes or insurance.
However, if the tenant experiences financial problems, rental payments
could be interrupted and in the event of tenant bankruptcy the Company
may be required to fund certain expenses in order to retain control or
take possession of the property. This could expose the Company to
successor liabilities and further affect liquidity. Such events may
adversely affect the Company's revenue and operating cash flow.

Management is aware of multi-unit tenants that are experiencing
financial difficulties. In the event the financial difficulties
continue, the Company's collection of rental payments could be
interrupted. At present, these tenants continue to pay rent
substantially in accordance with lease terms and there are no material
delinquencies. However, the Company continues to monitor each tenant's
situation carefully and will take appropriate action to place the
Company in a position to maximize the value of its investment.
Management has estimated the loss or impairment on the related
properties and included such charge in earnings through March 31, 2003.

The Company has experienced tenant bankruptcies and may commit further
resources in seeking resolution to these properties including funding
restaurant businesses directly or on behalf of successor tenants. For
example, where the value of the leased real estate is linked to the
financial performance of the tenant, CNL-RP may allocate capital to
invest in turnaround opportunities.

Certain net lease properties are pledged as collateral for the Series
2000-A and Series 2001 triple-net lease mortgage bonds payable. In the
event of a tenant default relating to any such pledged properties, the
Company may elect to substitute properties into these securitized pools
from properties it owns not otherwise pledged as collateral. In the
event that the Company has no such suitable substitute property, the
adverse performance of the pool might inhibit the Company's future
capital raising efforts, including the ability to refinance the Series
2001 bonds maturing in 2006.


CNL-RP management believes the combination of availability on its line
of credit and the projected disposition volume in 2003 will permit it
to meet its short-term liquidity objectives. Long-term liquidity
requirements will be met through a combination of selectively disposing
assets and reinvesting the proceeds in higher-yielding investments and
cash from operating activities.

Off-Balance Sheet Transactions

The Company holds a retained interest in $450 million in loans
transferred to unconsolidated trusts that provide the collateral for
long-term bonds. While the Company is not contractually obligated to
guarantee the repayment of the bonds, in the event borrower repayments
of principal and interest are not adequate to repay the bondholders,
the Company may elect to contribute funds into these unconsolidated
entities to supplement cash flows and maintain attractive ratings on
these pools.

The Company is a partner in several joint ventures to acquire and
improve and/or sell certain real properties that are accounted for
under the equity method. The Company's earnings reflect its
proportionate share of the earnings or losses of these activities.
Company management is evaluating the impact of certain recent
accounting pronouncements, as discussed further below, that may require
that these activities be fully consolidated in the financial
statements. At present, management expects the consolidation, if
required, to not be significant to the presentation of the Company's
consolidated balance sheet and statement of operations.

Interest Rate Risk

The Company generally invests in assets with a fixed return by
financing them with variable rate debt. Floating interest rates on
variable rate debt expose the Company to interest rate risk. As of
March 31, 2003, the Company's variable rate debt includes the
following:

o $12 million on its Revolver;

o $126 million on its mortgage warehouse facilities;

o $198 million on the June 2002 five-year financing; and

o $123 million outstanding on the Series 2001 bonds.

Generally, the Company uses derivative financial instruments (primarily
interest rate swap contracts) to hedge against fluctuations in interest
rates from the time it originates and holds fixed-rate mortgage loans
until the time it sells them. Additionally, the Company uses interest
rate swaps and caps to hedge against fluctuations in interest rates on
a portion of its floating rate debt. Under interest rate swaps, the
Company agrees with other parties to exchange, at specified intervals,
the difference between fixed-rate and floating-rate interest amounts
calculated by reference to an agreed upon notional principal amount.
Under a cap, a third party agrees to assume any interest above a stated
rate. The Company will terminate certain of these contracts and both
the gain or loss on the sale of the loans and the additional gain or
loss on the termination of the interest rate swap contracts will be
measured and recognized in the consolidated statement of operations.

The Company also invests in certain financial instruments that are
subject to various forms of market risk such as interest rate
fluctuations, credit risk and prepayment risk. Management believes that
the value of its mortgage loans held for sale and its investments could
potentially change as a result of fluctuating interest rates, credit
risk, market sentiment and other external forces, which could
materially adversely affect the Company's liquidity and capital
resources.


Concerns over geopolitical and macroeconomic uncertainites and the
expected reduction in consumer spending have led to increased
volatility in the equity markets. An increase in investments in
treasury bonds has decreased yields in the treasury markets and while
further reductions are expected in short term interest rates, many
traders believe that the treasury market is at a low, and expect yield
increases in the near term.

Management estimates that a one-percentage point increase in long-term
interest rates as of March 31, 2003 would have resulted in a decrease
in the fair value of its fixed-rate loans held for sale of $0.9
million. This decline in fair value would have been offset by an
increase in the fair value of certain interest rate swap positions of
$1.4 million. In addition, a one-percentage point increase in
short-term interest rates for the quarter ended March 31, 2003 would
have resulted in additional interest costs of approximately $0.8
million. This sensitivity analysis contains certain simplifying
assumptions (for example, it does not consider the impact of changes in
prepayment risk or credit spread risk). Therefore, although it gives an
indication of the Company's exposure to interest rate change, it is not
intended to predict future results and the Company's actual results
will likely vary.

Management believes inflation has not significantly affected the
Company's earnings because the inflation rate has remained moderate.
Additionally, the Company's earnings primarily reflect long-term
investments with fixed rents or interest rates. The Company mainly
finances these investments with a combination of equity, senior notes
and borrowings under the revolving lines of credit or warehouse
facilities. During inflationary periods, which generally are
accompanied by rising interest rates, the Company's ability to grow may
be adversely affected because the yield on new investments may increase
at a slower rate than new borrowing costs. However, sustained low
inflation could lead to net lease pricing pressure as tenants request
decreasing rates for longer maturities.

Results from Operations

The following discussion of results from operations is by segment. All
segment results herein are before eliminating adjustments and results
of the holding company. As a result, the sum of amounts applicable to
each segment will not, in some cases, equal the Company total amount
reflected in the condensed consolidated statement of operations.
Company earnings by segment for comparative current quarter results are
reflected in the following table:


Net income by segment in millions For the three months ended March 31,
2003 2002
---------------- -----------------


Real estate segment $ 5.7 $ 5.7
Specialty finance segment 2.4 0.8
Other holding company results and consolidating
eliminations (0.1 ) (0.1 )
---------------- -----------------
Net income $ 8.0 $ 6.4
================ =================


o The real estate business segment posted comparable earnings in first
quarter 2003 compared to first quarter 2002. While interest expense
and property expenses have decreased, CNL-RP reflects larger
impairments in the current period resulting from financial
difficulties experienced by a few tenants, offsetting the decreased
interest expense. The real estate business segment repaid higher
interest rate debt in 2002 and in first quarter 2003 has benefited
from a lower interest rate environment. In addition, a significant
tenant default led to increased property expenses in early 2002 that
have not been repeated to date in 2003.

o The specialty finance business segment improvement between quarters
reflects primarily its expanded Investment Property Sales program
selling real estate properties generating gains to the Company of
$5.1 million in the quarter ended March 31, 2003 compared with gains
of $2.9 million during the comparison quarter in 2002, excluding
certain sales transacted through a joint venture.





Revenues

The total revenues by segment for comparative current quarter results
are as follows:


Total revenues by segment (in millions) For the three months ended March 31,
2003 2002
---------------- ----------------


Real estate segment $ 22.7 $ 22.3
Specialty finance segment * 9.4 48.6
Other holding company results and consolidating
eliminations (0.5 ) (0.5 )
---------------- ----------------
Total revenues $ 31.6 $ 70.4
================ ================

* See discussion below of the accounting treatment of discontinued
operations.

Revenues are discussed based on the individual segment results
beginning first with the results of the core real estate segment:

For the three months ended March 31,
Real estate segment revenues by line item (in millions) 2003 2002
----------------- ------------------
Rental income from operating leases $ 15.6 $ 15.9
Earned income from direct financing 2.7 3.0
Interest income from mortgage equipment and other
notes receivable 1.1 1.0
Investment and interest income 1.1 1.2
Other income 2.2 1.2
----------------- ------------------
Total segment revenues $ 22.7 $ 22.3
================= ==================


CNL-RP rental revenues and revenues from direct financing leases remain
fairly constant but reflect a slight overall decrease. During 2002,
CNL-RP divested itself of certain vacant and other real estate
properties and used the proceeds to decrease the business segment's
debt. However, the rental revenue from these properties was classified
as a component of discontinued operations for all periods presented and
is not included in the segment revenues above. The decrease in rental
related revenues between periods may be explained by noting that the
quarter ended March 31, 2002 reflected certain additional revenues
relating to the resolution of several tenant bankruptcies that served
to actually increase revenues and such additional revenues have not
occurred in the current period. Other income includes restaurant
operating revenues relative to certain turnaround opportunities being
pursued by the Company.

The revenues of the specialty finance segment are more variable than
those of the real estate segment. The following table provides
additional information relating to the revenues of this segment:


For the three months ended March 31,
Specialty finance segment revenues by line item
(in millions) 2003 2002
------------------ ------------------


Sale of real estate $ 2.3 $ 37.2
Rental income from operating leases 0.2 3.9
Interest income from mortgage equipment and other
notes receivable 7.2 8.4
Investment and interest income 0.2 0.1
Other income 1.5 2.2
Net decrease in value of mortgage loans held for sale, net
of related hedge (2.0 ) (3.2 )
------------------ ------------------
Total segment revenues $ 9.4 $ 48.6
================== ==================



The comparability of CNL-FNC revenues is significantly impacted by the
method of accounting for its sales of real estate which are recorded
pursuant to new guidance described more fully below. The following
information assembles select financial information, presented in
accordance with generally accepted accounting principles, so as to
improve comparability between periods of this segment's Investment
Property Sales program sales, excluding sales conducted in a joint
venture program:


Specialty finance segment Investment Property
Sales program sales, excluding sales in For the three months ended March 31,
joint venture program (in millions) 2003 2002
------------------ ------------------


Sale of real estate, as reported $ 2.3 $ 37.2
Cost of real estate sold, as reported (2.1 ) (34.3 )
Gain on disposal of discontinued operations, net as
reported 4.9 --
------------------ ------------------
Total gains from Investment Property Sales program sales,
excluding sales in joint venture program $ 5.1 $ 2.9
================== ==================


Other matters impacting the comparability of the various components of
the CNL-FNC revenues between the comparative quarters presented
include:

o Rental income from operating leases reflects a decrease largely
because rental revenues associated with properties acquired
after December 31, 2001 are recorded as a component of income
from discontinued operations, and at March 31, 2003, more of
the inventory of properties on hand had been acquired after
December 31, 2001.

o Interest income from mortgage, equipment and other notes
receivable has decreased between the comparative quarters
presented as a result of normal principal repayments as well as
foreclosure action or the modification of terms relative to
certain delinquent loans between years. The Company has not
originated new mortgage loans since May of 2001, focusing
instead on the opportunity to refer potential borrowers to Bank
of America.

o Despite a hedging strategy designed to address market
volatility in the value of loans held for sale, in both periods
presented the loan valuation increases associated with
decreases in interest rates were more than offset by estimated
potential default losses and valuation decreases in hedge
contracts.

o Other income reflects, among other items, a $0.5 million
reduction associated with advisory services as the quarter
included fewer closed transactions in the current year, and a
$0.1 million reduction relating to fees from loans and other
referrals to Bank of America as a result of a modification of
certain terms of the alliance agreement.

Expenses

Cost of real estate sold is associated solely with the Investment
Property Sales program of the specialty finance segment and relates to
properties on hand at the beginning of 2002 that have since been sold.
Costs associated with properties acquired after 2001 are required to be
included as a component of the gain on disposal of discontinued
operations. A table and related discussion of the comparative results
from this program is reported above under the discussion of related
revenues.





General operating and administrative expenses consist primarily of
payroll-related and legal and other professional expenses. The
following table illustrates the comparative period expenses by segment:



General operating and administrative expenses by For the three months ended March 31,
segment (in millions) 2003 2002
------------------- ----------------


Real estate segment $ 3.9 $ 2.6
Specialty finance segment 5.0 5.1
Other holding company results and consolidating
eliminations (0.2 ) (0.2 )
------------------- ----------------
Total general operating and administrative expenses $ 8.7 $ 7.5
=================== ================


o CNL-RP general operating and administrative expenses reflect
the costs associated with resolving delinquencies and pursuing
turnaround opportunities presented by defaulted tenants
including the management of certain restaurant operations. The
increase compared to the prior quarters coincides with CNL-RP's
strategy to protect the existing investment portfolio and to
create new investment opportunities with disproportionately
high returns. Management believes that this strategy will
enable CNL-RP to capitalize on market dislocation and unique
sustainable opportunities in the restaurant industry.

o CNL-FN has maintained fairly constant levels of general and
administrative expenses across the periods presented.

CNL-RP has selectively leveraged assets and CNL-FN has leveraged its
real estate and loan assets and in addition has drawn on subordinated
notes to finance operations. As a result, interest expense constitutes
one of the most significant operating expenses, excluding cost of real
estate sold by CFN-FN, which is a component of the gain from the
disposal of discontinued operations for properties acquired after 2001.
Certain interest expense on properties acquired by CNL-FN after 2001 is
included in operating results from discontinued operations.


For the three months ended March 31,
Interest expenses by segment (in millions) 2003 2002
---------------- -----------------


Real estate segment $ 6.9 $ 8.4
Specialty finance segment 5.8 7.5
Other holding company results and consolidating
eliminations (0.1 ) (0.2 )
---------------- -----------------
Total interest expense $ 12.6 $ 15.7
================ =================


o CNL-RP has decreased its level of debt throughout most of 2002
through the sales of real estate. The segment realized a
decrease of nearly 20 percent in interest expense from first
quarter 2002 to first quarter 2003 because of the decreased
debt and as a result of a decline in interest rates.

o CNL-FN has reduced its interest-bearing debt, in particular as
a result of decreased real estate assets on hand as it entered
2003 compared with 2002. The decrease is due in part to a
decrease in loan assets and the corresponding debt from first
quarter 2002 as a result of principal amortization, payoffs and
foreclosures without the origination of new loans to replace
these assets. The decrease is also due to the fact that
interest expense associated with properties acquired after
December 31, 2001 are recorded as a component of income from
discontinued operations. While the weighted average interest
charged by the mortgage warehouse facilities has decreased from
4.59 percent in 2002 to 2.35 percent in 2003, the weighted
average rate charged by the June 2002 five-year financing of
over $225 million in loans is 5.79 percent. By removing these
assets from warehouse financing, the Company complied with the
terms of the warehouse facility and was able to preserve net
spread resulting from the excess of the interest income
received over the interest expense paid, despite the increased
interest expense on the five year financing.


The Company recognized $0.2 million in property expenses during the
three months ended March 31, 2003 compared with $1.9 million in the
three months ended March 31, 2002. These expenses typically occur when
properties are defaulted in the real estate segment. A large number of
defaulted properties led to significant estimated property expenses in
the first quarter last year, some of which were able to be reversed
later in 2002 when actual expenses were paid. In 2003, however, fewer
vacant properties are on hand. Some expenses previously presented in
this category associated with properties treated as discontinued
operations are incorporated in the income or loss from discontinued
operations for all periods presented.

Expense categories such as state taxes and depreciation and
amortization expenses have reflected and will continue to reflect the
level of assets invested in leased properties. Certain of these
expenses have been reflected as a component of discontinued operations.

The Company recorded a provision for loan losses of $0.4 million and
$0.1 million in first quarters 2003 and 2002, respectively, relating to
its portfolio of loans held to maturity.

The Company has recorded impairment provisions of $2.6 million in the
three months March 31, 2003, excluding impairments on properties
treated as discontinued operations as described below, compared with
$0.7 million in the three months ended March 31, 2002. Impairment
provisions are recorded when circumstances indicate that future
expected cash flows do not recover the carrying cost of the individual
properties. In the current period certain properties required
impairment charges due to financial difficulties experienced by a few
tenants.

The Company accounts for certain of its revenues and expenses as
originating from discontinued operations pursuant to Statement of
Financial Accounting Standard No. 144 "Accounting for the Impairment or
Disposal of Long-Lived Assets" ("FAS 144"). FAS 144 requires that sales
of real estate, or the designation of a real estate asset as held for
sale, be treated as discontinued operations. Any gain or loss from such
disposition, and any income or expenses associated with these real
estate assets, are included in the income statement as discontinued
operations. CNL-FN's Investment Property Sales program, a vital piece
of its ongoing operating strategy and a contributor of substantial
gains is nonetheless deemed to fall under the new guidance. Therefore,
gains from properties sold under the Investment Property Sales program,
unless acquired before January 1, 2002, are included as discontinued
operations; income and expenses associated with Investment Property
Sales program assets designated as held for sale after December 31,
2001 are also included in discontinued operations. In addition, CNL-RP
has designated certain real estate assets since December 31, 2001 as
held for sale and has included income and expenses associated with the
assets as well as the gain or loss from any dispositions of these
assets as discontinued operations for all periods presented. The table
below illustrates the treatment of discontinued operations by segment:






For the three months ended March 31,
Income (loss) from discontinued operations by segment
(in millions) 2003 2002
----------------- -----------------


Real estate segment discontinued operations:
Operating loss $ (0.4 ) $ (0.1 )
Gains or (losses) on disposal of discontinued
operations 0.3 (0.1 )
Specialty finance segment discontinued operations:
Operating income 1.5 0.1
Gains on disposal of discontinued operations 4.9 --
----------------- -----------------
Total income (loss) discontinued operations $ 6.3 $ (0.1 )
================= =================



In November 2002, FASB issued FASB Interpretation No. 45 ("FIN 45"),
"Guarantor's Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others". FIN 45
clarifies the requirements relating to a guarantor's accounting for,
and disclosure of, the issuance of certain types of guarantees. FIN 45
requires that upon issuance of a guarantee, the guarantor must
recognize a liability for the fair value of the obligation it assumes
under that guarantee. FIN 45's provisions for initial recognition and
measurement are to be applied on a prospective basis to guarantees
issued or modified after December 31, 2002. The Company's previous
accounting for guarantees issued prior to January 1, 2003 are not
required to be revised or restated to reflect the effect of the
recognition and measurement provisions of FIN 45. The Company has not
issued or modified any guarantees since the adoption of FIN 45.

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
meeting the criteria of a variable interest entity in its financial
statements. FIN 46 requires that a variable interest entity be
consolidated by a company if that company is subject to a majority risk
of loss from the variable interest entity's activities or entitled to
receive a majority of the entity's residual returns or both. Prior to
FIN 46, a company generally included another entity in its consolidated
financial statements only if it controlled the entity through voting
interests. Consolidation of variable interest 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 that adoption of this standard will not change the accounting
for its bankruptcy remote securitization entities. Management believes
adoption of this standard may result in either consolidation or
additional disclosure requirements with respect to the Company's
unconsolidated subsidiaries, however, such consolidation is not
expected to significantly impact the Company's financial position or
results of operations.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Information regarding the Company's market risk at December 31, 2002 is
included in its Annual Report on Form 10-K for the year ended December
31, 2002. The material changes in the Company's market risk are
discussed in Item 2 above. Information regarding the Company's market
risk relating to changes in interest rates are incorporated herein by
reference to Item 2, "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Interest Rate Risk" herein.





Item 4. Controls and Procedures.


The Company maintains a set of disclosure controls and procedures
designed to ensure that information required to be disclosed in the
Company'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 Company have
evaluated the Company's disclosure controls and procedures within 90
days prior to the filing of this Quarterly Report on Form 10-Q 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 II. OTHER INFORMATION


Item 1. Legal Proceedings. Inapplicable.

Item 2. Changes in Securities. Inapplicable.

Item 3. Default upon Senior Securities. Inapplicable.

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

Item 5. Other Information. Inapplicable.

Item 6. Exhibits and Reports on Form 8-K.

(a) Exhibits

2.1 Agreement and Plan of Merger, by and among the Registrant, CFA
Acquisition Corp., CNL Fund Advisors, Inc. and CNL Group, Inc.,
dated March 11, 1999 (included as Exhibit 10.38 to the
Registrant's Registration Statement No. 333-74329 on Form S-4
(the "Form S-4") as originally filed and incorporated herein by
reference).

2.2 Agreement and Plan of Merger, by and among the Registrant, CFC
Acquisition Corp., CFS Acquisition Corp., CNL Financial Corp.,
CNL Financial Services, Inc., CNL Group, Inc., Five Arrows
Realty Securities L.L.C., Robert A. Bourne, Curtis B.
McWilliams and Brian Fluck, dated March 11, 1999 (included as
Exhibit 10.39 to the Form S-4 as originally filed and
incorporated herein by reference).

3.1 CNL American Properties Fund, Inc. Amended and Restated
Articles of Incorporation, as amended (included as Exhibit 3.1
to the Registrant's Form 10-Q for the quarter ended June 30,
1999 and incorporated herein by reference).

3.2 CNL American Properties Fund, Inc. Amended and Restated Bylaws
(included as Exhibit 3.2 to the Registrant's Registration
Statement No. 333-37657 on Form S-11 and incorporated herein by
reference).

3.3 CNL American Properties Fund, Inc. Second Amended and Restated
Articles of Incorporation (included as Exhibit 3.3 to the
Registrant's Form 10-Q for the quarter ended June 30, 2000 and
incorporated herein by reference).

3.4 Articles of Amendment to Second Amended and Restated Articles
of Incorporation of CNL American Properties Fund, Inc.
(included as Exhibit 3.4 to the Registrant's Form 10-Q for the
quarter ended June 30, 2002 and incorporated herein by
reference).

4.1 Form of Stock Certificate (included as Exhibit 4.5 to the
Registrant's Registration Statement No. 33-78790 on Form S-11
and incorporated herein by reference).

10.1 Form of Indemnification Agreement dated as of April 18, 1995,
between the Registrant and each of James M. Seneff, Jr., Robert
A. Bourne, G. Richard Hostetter, J. Joseph Kruse, Richard C.
Huseman, John T. Walker, Jeanne A. Wall, Lynn E. Rose and Edgar
J. McDougall, dated as of January 27, 1997, between the
Registrant and Steven D. Shackelford, dated as of February 18,
1998, between the Registrant and Curtis B. McWilliams, and
dated as of September 1, 1999, between the Registrant and each
of Howard J. Singer, John L. Farren, Timothy J. Neville,
Michael I. Wood and Barry L. Goff (included as Exhibit 10.9 to
the Registrant's Registration Statement No. 333-15411 on Form
S-11 and incorporated herein by reference).


10.2 Amended and Restated Agreement of Limited Partnership of CNL
APF Partners, LP (included as Exhibit 10.50 to Amendment No. 2
to the Form S-4 and incorporated herein by reference).

10.3 Franchise Receivable Funding and Servicing Agreement dated as
of October 14, 1999 between CNL APF Partners, LP and Neptune
Funding Corporation (included as Exhibit 10.5 to the
Registrant's Form 10-K for the year ended December 31, 1999 and
incorporated herein by reference).

10.4 Interim Wholesale Mortgage Warehouse and Security Agreement
dated as of September 18, 1998, and Amended Agreement dated as
of August 30, 1999 between CNL APF Partners, LP and Prudential
Securities Credit Corporation (included as Exhibit 10.6 to the
Registrant's Form 10-K for the year ended December 31, 1999 and
incorporated herein by reference).

10.5 1999 Performance Incentive Plan (included as Exhibit 10.1 to
Amendment No. 1 to the Form S-4 and incorporated herein by
reference).

10.6 Registration Rights Agreement by and among the Registrant,
Robert A. Bourne, Curtis B. McWilliams, John T. Walker, Howard
Singer, Steven D. Shackelford and CNL Group, Inc., dated as of
March 11, 1999 (included as Exhibit 10.40 to Amendment No. 1 to
the Form S-4 and incorporated herein by reference).

10.7 Registration Rights Agreement by and among the Registrant, Five
Arrows Realty Securities L.L.C., James M. Seneff, Jr., Robert
A. Bourne, Curtis B. McWilliams and CNL Group, Inc., dated as
of March 11, 1999 (included as Exhibit 10.41 to Amendment No. 1
to the Form S-4 and incorporated herein by reference).

10.8 Employment Agreement by and between Curtis B. McWilliams and
the Registrant, dated September 15, 1999 (included as Exhibit
10.42 to Amendment No. 2 to the Form S-4 and incorporated
herein by reference).

10.9 Employment Agreement by and between Steven D. Shackelford and
the Registrant, dated September 15, 1999 (included as Exhibit
10.43 to Amendment No. 2 to the Form S-4 and incorporated
herein by reference).

10.10 Employment Agreement by and between Barry L. Goff and the
Registrant, dated September 15, 1999 (included as Exhibit 10.46
to Amendment No. 2 to the Form S-4 and incorporated herein by
reference).

10.11 Employment Agreement by and between Robert W. Chapin and the
Registrant, dated September 15, 1999 (included as Exhibit 10.47
to Amendment No. 2 to the Form S-4 and incorporated herein by
reference).

10.12 Employment Agreement by and between Michael Wood and the
Registrant, dated August 31, 1999 (included as Exhibit 10.19 to
the Registrant's Form 10-Q for the quarter ended March 31, 2001
and incorporated herein by reference).

10.13 Employment Agreement by and between Brent Heaton and the
Registrant, dated September 29, 1999 (included as Exhibit 10.20
to the Registrant's Form 10-Q for the quarter ended March 31,
2001 and incorporated herein by reference).






10.14 Addendum to Employment Agreement dated as of November 1, 1999,
between the Registrant and Curtis McWilliams (included as
Exhibit 10.21 to the Registrant's Form 10-Q for the quarter
ended March 31, 2001 and incorporated herein by reference). The
following persons have signed a substantially identical
Addendum relating to their respective employment agreements;
Steve Shackelford (dated November 1, 1999); John Walker (dated
November 3, 1999); Barry Goff (dated November 1, 1999); and
Brent Heaton (dated November 3, 1999).

10.15 Addendum to Employment Agreement dated as of November 1, 1999,
between the Registrant and Robert Chapin (included as Exhibit
10.22 to the Registrant's Form 10-Q for the quarter ended March
31, 2001 and incorporated herein by reference). The following
persons have signed a substantially identical Addendum relating
to their respective employment agreements: Howard Singer (dated
November 1, 1999); Michael Wood (dated November 8, 1999); and
Timothy Neville (dated November 24, 1999).

10.16 Second Addendum to Employment Agreement dated as of June 16,
2000, between the Registrant and Curtis McWilliams (included as
Exhibit 10.23 to the Registrant's Form 10-Q for the quarter
ended March 31, 2001 and incorporated herein by reference). The
following persons have signed a substantially identical Second
Addendum relating to their respective employment agreements:
Howard Singer (dated June 19, 2000); Robert Chapin (dated June
20, 2000); and Brent Heaton (dated October 30, 2000).

10.17 Second Addendum to Employment Agreement dated as of August 20,
2000, between the Registrant and Barry Goff (included as
Exhibit 10.24 to the Registrant's Form 10-Q for the quarter
ended March 31, 2001 and incorporated herein by reference).

10.18 Second Addendum to Employment Agreement dated as of September
1, 2000, between the Registrant and Steve Shackelford (included
as Exhibit 10.25 to the Registrant's Form 10-Q for the quarter
ended March 31, 2001 and incorporated herein by reference).

10.19 Second Addendum to Employment Agreement dated as of October 24,
2000, between the Registrant and Michael Wood (included as
Exhibit 10.27 to the Registrant's Form 10-Q for the quarter
ended March 31, 2001 and incorporated herein by reference).

10.20 Amended and Restated Master Purchase Agreement dated as of
October 11, 2001, among Bank of America, N.A., CNL Financial
VII, LP and CNL Franchise Network, LP (included as Exhibit
10.29 to the Registrant's Form 10-K for the year ended December
31, 2001 and incorporated herein by reference and incorporated
herein by reference).

10.21 Third Amended and Restated Side Letter dated as of October 11,
2001, among Bank of America, N.A., CNL Financial VII, LP and
CNL Franchise Network, LP (included as Exhibit 10.30 to the
Registrant's Form 10-K for the year ended December 31, 2001 and
incorporated herein by reference).

10.22 Loan and Security Agreement dated as of June 14, 2002 between
CNL Financial IX, LP and Nieuw Amsterdam Receivables
Corporation (included as Exhibit 10.31 to the Registrant's Form
10-Q for the quarter ended June 30, 2002 and incorporated
herein by reference).

99.1 Certification of Co-Chief Executive Officer 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 Co-Chief Executive Officer pursuant to 18
U.S.C. Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (filed herewith).

99.3 Certification of Chief Financial Officer 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 quarter
ended March 31, 2003.






SIGNATURES


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

DATED this 13th day of May, 2003.


CNL AMERICAN PROPERTIES FUND, INC.


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


By: /s/ Curtis B. McWilliams
----------------------------
CURTIS B. MCWILLIAMS
co-Chief Executive Officer
(Principal Executive Officer)


By: /s/ Steven D. Shackelford
----------------------------
STEVEN D. SHACKELFORD
Chief Financial Officer
(Principal Financial and
Accounting Officer)





CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER

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


I, James M. Seneff, Jr., the Co-Chief Executive Officer of CNL American
Properties Fund, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of CNL
American Properties Fund, Inc.;

2. Based on my knowledge, this quarterly 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 quarterly
report;

3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly 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 quarterly report;

4. The registrant's other certifying officers 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 we 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 quarterly
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 quarterly report
(the "Evaluation Date"); and

c. Presented in this quarterly 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 officers 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 function):

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 officers and I have indicated
in this quarterly 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: May 13, 2003


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





CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER

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


I, Curtis B. McWilliams, the Co-Chief Executive Officer of CNL American
Properties Fund, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of CNL
American Properties Fund, Inc.;

2. Based on my knowledge, this quarterly 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 quarterly
report;

3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly 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 quarterly report;

4. The registrant's other certifying officers 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 we 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 quarterly
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 quarterly report
(the "Evaluation Date"); and

c. Presented in this quarterly 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 officers 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 function):

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 officers and I have indicated
in this quarterly 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: May 13, 2003

/s/ Curtis B. McWilliams
- -------------------------
Curtis B. McWilliams
Co-Chief Executive Officer





CERTIFICATION OF CHIEF FINANCIAL OFFICER

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


I, Steven D. Shackelford, Chief Financial Officer of CNL American
Properties Fund, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of CNL
American Properties Fund, Inc.;


2. Based on my knowledge, this quarterly 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 quarterly
report;

3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly 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 quarterly report;

4. The registrant's other certifying officers 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 we 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 quarterly
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 quarterly report
(the "Evaluation Date"); and

c. Presented in this quarterly 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 officers 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 function):

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 officers and I have indicated
in this quarterly 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: May 13, 2003

/s/ Steven D. Shackelford
- -------------------------
Steven D. Shackelford
Chief Financial Officer





EXHIBIT INDEX


Exhibit Number

(c) Exhibits


2.1 Agreement and Plan of Merger, by and among the
Registrant, CFA Acquisition Corp., CNL Fund Advisors,
Inc. and CNL Group, Inc., dated March 11, 1999
(included as Exhibit 10.38 to the Registrant's
Registration Statement No. 333-74329 on Form S-4 (the
"Form S-4") as originally filed and incorporated herein
by reference).

2.2 Agreement and Plan of Merger, by and among the
Registrant, CFC Acquisition Corp., CFS Acquisition
Corp., CNL Financial Corp., CNL Financial Services,
Inc., CNL Group, Inc., Five Arrows Realty Securities
L.L.C., Robert A. Bourne, Curtis B. McWilliams and
Brian Fluck, dated March 11, 1999 (included as Exhibit
10.39 to the Form S-4 as originally filed and
incorporated herein by reference).

3.1 CNL American Properties Fund, Inc. Amended and
Restated Articles of Incorporation, as amended
(included as Exhibit 3.1 to the Registrant's Form
10-Q for the quarter ended June 30, 1999 and
incorporated herein by reference).

3.2 CNL American Properties Fund, Inc. Amended and Restated
Bylaws (included as Exhibit 3.2 to the Registrant's
Registration Statement No. 333-37657 on Form S-11 and
incorporated herein by reference).

3.3 CNL American Properties Fund, Inc. Second Amended and
Restated Articles of Incorporation (included as Exhibit
3.3 to the Registrant's Form 10-Q for the quarter ended
June 30, 2000 and incorporated herein by reference).

3.4 Articles of Amendment to Second Amended and Restated
Articles of Incorporation of CNL American Properties
Fund, Inc. (included as Exhibit 3.4 to the Registrant's
Form 10-Q for the quarter ended June 30, 2002 and
incorporated herein by reference).

4.1 Form of Stock Certificate (included as Exhibit 4.5 to
the Registrant's Registration Statement No. 33-78790 on
Form S-11 and incorporated herein by reference).

10.1 Form of Indemnification Agreement dated as of April 18,
1995, between the Registrant and each of James M.
Seneff, Jr., Robert A. Bourne, G. Richard Hostetter, J.
Joseph Kruse, Richard C. Huseman, John T. Walker,
Jeanne A. Wall, Lynn E. Rose and Edgar J. McDougall,
dated as of January 27, 1997, between the Registrant
and Steven D. Shackelford, dated as of February 18,
1998, between the Registrant and Curtis B. McWilliams,
and dated as of September 1, 1999, between the
Registrant and each of Howard J. Singer, John L.
Farren, Timothy J. Neville, Michael I. Wood and Barry
L. Goff (included as Exhibit 10.9 to the Registrant's
Registration Statement No. 333-15411 on Form S-11 and
incorporated herein by reference).

10.2 Amended and Restated Agreement of Limited Partnership
of CNL APF Partners, LP (included as Exhibit 10.50 to
Amendment No. 2 to the Form S-4 and incorporated herein
by reference).

10.3 Franchise Receivable Funding and Servicing Agreement
dated as of October 14, 1999 between CNL APF Partners,
LP and Neptune Funding Corporation (included as Exhibit
10.5 to the Registrant's Form 10-K for the year ended
December 31, 1999 and incorporated herein by
reference).


10.4 Interim Wholesale Mortgage Warehouse and Security
Agreement dated as of September 18, 1998, and Amended
Agreement dated as of August 30, 1999 between CNL APF
Partners, LP and Prudential Securities Credit
Corporation (included as Exhibit 10.6 to the
Registrant's Form 10-K for the year ended December 31,
1999 and incorporated herein by reference).

10.5 1999 Performance Incentive Plan (included as Exhibit
10.1 to Amendment No. 1 to the Form S-4 and
incorporated herein by reference).

10.6 Registration Rights Agreement by and among the
Registrant, Robert A. Bourne, Curtis B. McWilliams,
John T. Walker, Howard Singer, Steven D. Shackelford
and CNL Group, Inc., dated as of March 11, 1999
(included as Exhibit 10.40 to Amendment No. 1 to the
Form S-4 and incorporated herein by reference).

10.7 Registration Rights Agreement by and among the
Registrant, Five Arrows Realty Securities L.L.C., James
M. Seneff, Jr., Robert A. Bourne, Curtis B. McWilliams
and CNL Group, Inc., dated as of March 11, 1999
(included as Exhibit 10.41 to Amendment No. 1 to the
Form S-4 and incorporated herein by reference).

10.8 Employment Agreement by and between Curtis B.
McWilliams and the Registrant, dated September 15, 1999
(included as Exhibit 10.42 to Amendment No. 2 to the
Form S-4 and incorporated herein by reference).

10.9 Employment Agreement by and between Steven D.
Shackelford and the Registrant, dated September 15,
1999 (included as Exhibit 10.43 to Amendment No. 2 to
the Form S-4 and incorporated herein by reference).

10.10 Employment Agreement by and between Barry L. Goff and
the Registrant, dated September 15, 1999 (included as
Exhibit 10.46 to Amendment No. 2 to the Form S-4 and
incorporated herein by reference).

10.11 Employment Agreement by and between Robert W. Chapin
and the Registrant, dated September 15, 1999 (included
as Exhibit 10.47 to Amendment No. 2 to the Form S-4 and
incorporated herein by reference).

10.12 Employment Agreement by and between Michael Wood and
the Registrant, dated August 31, 1999 (included as
Exhibit 10.19 to the Registrant's Form 10-Q for the
quarter ended March 31, 2001 and incorporated herein by
reference).

10.13 Employment Agreement by and between Brent Heaton and
the Registrant, dated September 29, 1999 (included as
Exhibit 10.20 to the Registrant's Form 10-Q for the
quarter ended March 31, 2001 and incorporated herein by
reference).

10.14 Addendum to Employment Agreement dated as of November
1, 1999, between the Registrant and Curtis McWilliams
(included as Exhibit 10.21 to the Registrant's Form
10-Q for the quarter ended March 31, 2001 and
incorporated herein by reference). The following
persons have signed a substantially identical Addendum
relating to their respective employment agreements;
Steve Shackelford (dated November 1, 1999); John Walker
(dated November 3, 1999); Barry Goff (dated November 1,
1999); and Brent Heaton (dated November 3, 1999).






10.15 Addendum to Employment Agreement dated as of November
1, 1999, between the Registrant and Robert Chapin
(included as Exhibit 10.22 to the Registrant's Form
10-Q for the quarter ended March 31, 2001 and
incorporated herein by reference). The following
persons have signed a substantially identical Addendum
relating to their respective employment agreements:
Howard Singer (dated November 1, 1999); Michael Wood
(dated November 8, 1999); and Timothy Neville (dated
November 24, 1999).

10.16 Second Addendum to Employment Agreement dated as of
June 16, 2000, between the Registrant and Curtis
McWilliams (included as Exhibit 10.23 to the
Registrant's Form 10-Q for the quarter ended March 31,
2001 and incorporated herein by reference). The
following persons have signed a substantially identical
Second Addendum relating to their respective employment
agreements: Howard Singer (dated June 19, 2000); Robert
Chapin (dated June 20, 2000); and Brent Heaton (dated
October 30, 2000).

10.17 Second Addendum to Employment Agreement dated as of
August 20, 2000, between the Registrant and Barry Goff
(included as Exhibit 10.24 to the Registrant's Form
10-Q for the quarter ended March 31, 2001 and
incorporated herein by reference).

10.18 Second Addendum to Employment Agreement dated as of
September 1, 2000, between the Registrant and Steve
Shackelford (included as Exhibit 10.25 to the
Registrant's Form 10-Q for the quarter ended March 31,
2001 and incorporated herein by reference).

10.19 Second Addendum to Employment Agreement dated as of
October 24, 2000, between the Registrant and Michael
Wood (included as Exhibit 10.27 to the Registrant's
Form 10-Q for the quarter ended March 31, 2001 and
incorporated herein by reference).

10.20 Amended and Restated Master Purchase Agreement dated as
of October 11, 2001, among Bank of America, N.A., CNL
Financial VII, LP and CNL Franchise Network, LP
(included as Exhibit 10.29 to the Registrant's Form
10-K for the year ended December 31, 2001 and
incorporated herein by reference and incorporated
herein by reference).

10.21 Third Amended and Restated Side Letter dated as of
October 11, 2001, among Bank of America, N.A., CNL
Financial VII, LP and CNL Franchise Network, LP
(included as Exhibit 10.30 to the Registrant's Form
10-K for the year ended December 31, 2001 and
incorporated herein by reference).

10.22 Loan and Security Agreement dated as of June 14, 2002
between CNL Financial IX, LP and Nieuw Amsterdam
Receivables Corporation (included as Exhibit 10.31 to
the Registrant's Form 10-Q for the quarter ended June
30, 2002 and incorporated herein by reference).

99.1 Certification of Co-Chief Executive Officer 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 Co-Chief Executive Officer pursuant to
18 U.S.C. Section 1350 as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

99.3 Certification of Chief Financial Officer 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
CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER






EXHIBIT 99.2
CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER



EXHIBIT 99.3
CERTIFICATION OF CHIEF FINANCIAL OFFICER