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

FORM 10-K

(Mark One)

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

For the fiscal year ended December 31, 2002

OR

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

For the transition period from to

Commission file number 0-22485

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

Florida 59-3295393
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

450 South Orange Avenue
Orlando, Florida 32801-3336
(Address of principal executive offices, including zip code)

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

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

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

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

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

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

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. No [x]

Indicate by check mark whether the registrant is an accelerated filer
(as defined in Exchange Act Rule 12b-2): Yes___ No X

Aggregate market value of the voting stock held by nonaffiliates of the
registrant: The registrant registered an offering of 3,000,000 units of limited
partnership interest (the "Units") on Form S-11 under the Securities Act of
1933, as amended. Since no established market for such Units exists, there is no
market value for such Units. Each Unit was originally sold at $10 per Unit.

DOCUMENTS INCORPORATED BY REFERENCE:
None




PART I

Item 1. Business

CNL Income Fund XVII, Ltd. (the "Registrant" or the "Partnership") is a
limited partnership which was organized pursuant to the laws of the State of
Florida on February 10, 1995. The general partners of the Partnership are Robert
A. Bourne, James M. Seneff, Jr. and CNL Realty Corporation, a Florida
corporation (the "General Partners"). Beginning on September 2, 1995, the
Partnership offered for sale up to $30,000,000 of limited partnership interests
(the "Units") (3,000,000 Units at $10 per Unit) pursuant to a registration
statement on Form S-11 under the Securities Act of 1933, as amended, effective
August 11, 1995. The offering terminated on September 19, 1996, at which date
the maximum offering proceeds of $30,000,000 had been received from investors
who were admitted to the Partnership as limited partners (the "Limited
Partners").

The Partnership was organized to acquire both newly constructed and
existing restaurant properties, as well as properties upon which restaurants
were to be constructed (the "Properties"), which are leased primarily to
operators of national and regional fast-food, family-style and casual dining
restaurant chains (the "Restaurant Chains"). Net proceeds to the Partnership
from its offering of Units, after deduction of organizational and offering
expenses, totalled $26,400,000 and were used as of December 31, 1998, to acquire
29 Properties, pay acquisition fees totalling $1,350,000 and to establish a
working capital reserve for Partnership purposes. The 29 Properties included
four Properties owned by joint ventures in which the Partnership is a
co-venturer and three Properties owned with affiliates of the General Partners
as tenants-in-common.

As of December 31, 1999, the Partnership owned 29 Properties, either
directly or indirectly through joint venture or tenancy in common arrangements.
In January 2000, the Partnership reinvested the majority of the net sales
proceeds received from El Cajon Joint Venture in a Property in Wilmette,
Illinois. In addition, during 2000, the Partnership sold its Properties in
Warner Robins, Georgia and Long Beach, California. During the year ended
December 31, 2001, the Partnership reinvested the net sales proceeds from the
2000 sale of the Property in Warner Robins, Georgia, and Long Beach, California
along with a portion of the net sales proceeds received from the 2001 sale of
the Property in Houston, Texas, and entered into a joint venture arrangement,
CNL VII & XVII Lincoln Joint Venture, with an affiliate of the General Partners
to purchase and hold one property in Lincoln, Nebraska, indirectly through a
joint venture in which the Partnership is a co-venturer. In addition, during
2001, the Partnership sold its Properties in Kentwood, Missouri and El Dorado,
California, and reinvested a portion of these net sales proceeds in a Property
in Austin, Texas, and in a Property in Waldorf, Maryland, as tenants-in-common,
with affiliates of the General Partners, which are Florida limited partnerships.
In addition, during 2001, the Partnership distributed to the Limited Partners, a
portion of the net sales proceeds received from the sale in Inglewood,
California and a portion of the net sales proceeds received from the sale of the
Property in Houston, Texas. During 2002, the Partnership sold its properties in
Mesquite, Nevada; Knoxville, Tennessee; and Wilmette, Illinois, and reinvested
the majority of the sales proceeds in a Property in Houston Texas; a joint
venture arrangement, Katy Joint Venture, with an affiliate of the General
Partners and a Florida limited partnership, to purchase and hold one Property in
Katy, Texas; and in a Property in Kenosha, Wisconsin, as tenants-in-common, with
another affiliate of the General Partners and a Florida limited partnership.
Also during 2002, CNL Mansfield Joint Venture, in which the Partnership owns a
21% interest, sold its Property in Mansfield, Texas and reinvested the proceeds
in a Property in Arlington, Texas.

As of December 31, 2002, the Partnership owned 27 Properties. The 27
Properties include five Properties owned by joint ventures in which the
Partnership is a co-venturer and six Properties owned with affiliates as
tenants-in-common. The Partnership generally leases the Properties on a
triple-net basis with the lessees responsible for all repairs and maintenance,
property taxes, insurance and utilities.

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






Leases

Although there are variations in the specific terms of the leases, the
following is a summarized description of the general structure of the
Partnership's leases. The leases of the Properties provide for initial terms
ranging from 10 to 20 years (the average being 18 years) and expire between 2011
and 2020. The majority of the leases are on a triple-net basis, with the lessees
responsible for all repairs and maintenance, property taxes, insurance and
utilities. The leases of the Properties provide for minimum base annual rental
payments (payable in monthly installments) ranging from approximately $63,000 to
$246,400. The majority of the leases provide for percentage rent, based on sales
in excess of a specified amount. In addition, the majority of the leases provide
that, commencing in specified lease years (generally the sixth lease year), the
annual base rent required under the terms of the lease will increase.

Generally, the leases of the Properties provide for two to five
five-year renewal options subject to the same terms and conditions as the
initial lease. Lessees of 22 of the Partnership's 27 Properties also have been
granted options to purchase Properties at the Property's then fair market value
after a specified portion of the lease term has elapsed. Fair market value will
be determined through an appraisal by an independent appraisal firm. Under the
terms of certain leases, the option purchase price may equal the Partnership's
original cost to purchase the Property (including acquisition costs), plus a
specified percentage from the date of the lease or a specified percentage of the
Partnership's purchase price, if that amount is greater than the Property's fair
market value at the time the purchase option is exercised.

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

During 2001, Phoenix Restaurant Group, Inc. ("PRG") filed for
bankruptcy and neither rejected, nor affirmed the lease held by the Partnership
with an affiliate of the general partners, as tenants-in-common. The Partnership
owns approximately a 27% interest in the tenancy in common. During 2002, the
bankruptcy court assigned the lease relating to the property in Corpus Christi,
Texas to RAI, LLC, which is an affiliate of the General Partners. All other
lease terms remained the same.

Effective May 2002, the leases relating to the Arby's Properties in
Muncie and Plainfield, Indiana were amended to eliminate guaranteed scheduled
rent increases. The General Partners do not believe that the rent reductions
will have a material adverse effect on the results of operations of the
Partnership. All other lease terms remain unchanged.

During 2002, the Partnership reinvested the net sales proceeds it
received from the sales of the Properties in Mesquite, Nevada; Knoxville,
Tennessee; and Wilmette, Illinois, in a Taco Cabana Property in located in
Houston, Texas; a joint venture arrangement, Katy Joint Venture, with an
affiliate of the General Partners and a Florida limited partnership, to purchase
and hold a Taco Cabana Property in Katy, Texas; and in a Texas Roadhouse
Property in Kenosha, Wisconsin, as tenants-in-common, with another affiliate of
the General Partners and a Florida limited partnership. Also during 2002, CNL
Mansfield Joint Venture, in which the Partnership owns a 21% interest, sold its
Property in Mansfield, Texas and reinvested the proceeds in a Jack in the Box
Property in Arlington, Texas. The lease terms for these Properties are
substantially the same as the Partnership's other leases.

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

Major Tenants

During the year ended December 31, 2002, three lessees of the
Partnership, Golden Corral Corporation, National Restaurant Enterprises, Inc.,
and RTM Indianapolis, Inc. and RTM Southwest Texas, Inc. (which are affiliated
entities under common control) (hereinafter referred as "RTM, Inc."), each
contributed more than 10% of the Partnership's total rental revenues (including
rental revenues from the Partnership's share of rental income from Properties
owned by joint ventures and Properties owned with separate affiliates of the
General Partners as tenants-in-common). As of December 31, 2002, Golden Corral
Corporation was the lessee under leases relating to four restaurants, and
National Restaurant Enterprises, Inc. and RTM, Inc., were each the lessee under
leases relating to three restaurants. It is anticipated that based on the
minimum rental payments required by the leases, these three lessees each will
continue to contribute more than 10 percent of the Partnership's total rental
revenues in 2003. In addition, three Restaurant Chains, Golden Corral, Burger
King, and Arby's, each accounted for more than 10 percent of the Partnership's
total rental revenues during the year ended December 31, 2002 (including rental
revenues from the Partnership's share of rental income from Properties owned by
joint ventures and Properties owned with separate affiliates of the General
Partners as tenants-in-common). In 2003, it is anticipated that each of these
three Restaurant Chains will continue to contribute more than 10 percent of the
Partnership's rental revenues to which the Partnership is entitled under the
terms of the leases. Any failure of these lessees or Restaurant Chains could
have a material adverse affect on the Partnership's income if the Partnership is
not able to re-lease or sell the Properties in a timely manner. As of December
31, 2002, Golden Corral Corporation leased Properties with an aggregate carrying
value in excess of 20% of the total assets of the Partnership.

Joint Venture and Tenancy in Common Arrangements

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



Entity Name Year Ownership Partners Property

CNL Income Fund XVI, Ltd and 1996 19.56% CNL Income Fund XVI, Ltd. Fayetteville, NC
CNL Income Fund XVII,
Ltd. Tenants in Common

CNL Income Fund XI, Ltd. and 1997 27.42% CNL Income Fund XI, Ltd. Corpus Christi, TX
CNL Income Fund XVII,
Ltd. Tenants in Common

CNL Income Fund XIII, Ltd. 1997 36.91% CNL Income Fund XIII, Ltd. Akron, OH
and CNL Income Fund
XVII, Ltd. Tenants in
Common

CNL Mansfield Joint Venture 1997 21.00% CNL Income Fund VII, Ltd. Arlington, TX

Kingston Joint Venture 1997 60.06% CNL Income Fund XIV, Ltd. Kingston, TN

CNL Income Fund IV, Ltd. and 1999 24.00% CNL Income Fund IV, Ltd. Zephyrhills, FL
CNL Income Fund XVII,
Ltd. Tenants in Common

Ocean Shores Joint Venture 1999 30.94% CNL Income Fund X, Ltd. Ocean Shores, WA


CNL VII and XVII Lincoln 2001 86.00% CNL Income Fund VII, Ltd. Lincoln, NE
Joint Venture

CNL Income Fund VI, Ltd., CNL 2001 25.00% CNL Income Fund VI, Ltd. Waldorf, MD
Income Fund IX, Ltd. and CNL Income Fund IX, Ltd.
CNL Income Fund XVII,
Ltd. Tenants in Common

Katy Joint Venture 2002 40.00% CNL Income Fund IX, Ltd. Katy, TX

CNL Income Fund VIII, Ltd. 2002 90.00% CNL Income Fund VIII, Ltd. Kenosha, WI
and CNL Income Fund
XVII, Ltd. Tenants in
Common


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

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

CNL VII and XVII Lincoln Joint Venture and Katy Joint Venture, each has
an initial term of 30 years, and each of the other joint ventures has an initial
term of 20 years and, after the expiration the initial term, continues in
existence from year to year unless terminated at the option of either joint
venturer or by an event of dissolution. Events of dissolution include the
bankruptcy, insolvency or termination of any joint venturer, sale of the
Property owned by the joint venture and mutual agreement of the Partnership and
its joint venture partners to dissolve the joint venture. Any liquidation
proceeds, after paying joint venture debts and liabilities and funding reserves
for contingent liabilities, will be distributed first to the joint venture
partners with positive capital account balances in proportion to such balances
until such balances equal zero, and thereafter in proportion to each joint
venture partner's percentage interest in the joint venture.

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

In June 2002, the Partnership entered into a joint venture arrangement,
Katy Joint Venture, with CNL Income Fund IX, Ltd., an affiliate of the General
Partners and a Florida limited partnership to purchase and hold one property. In
addition, in August 2002, the Partnership entered into an agreement to hold a
Property in Kenosha, Wisconsin, as tenants-in-common, with CNL Income Fund VIII,
Ltd., an affiliate of the General Partners and a Florida limited partnership.

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

Certain Management Services

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

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

Competition

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

Employees

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


Item 2. Properties

As of December 31, 2002, the Partnership owned 27 Properties. Of the 27
Properties, 16 are owned by the Partnership in fee simple, five are owned
through joint venture arrangements and six are owned through tenancy in common
arrangements. See Item 1. Business - Joint Venture and Tenancy in Common
Arrangements. The Partnership is not permitted to encumber its Properties under
the terms of its partnership agreement. Reference is made to the Schedule of
Real Estate and Accumulated Depreciation for a listing of the Properties and
their respective costs, including acquisition fees and certain acquisition
expenses.

Description of Properties

Land. The Partnership's Property sites, owned directly and indirectly,
range from approximately 23,500 to 115,100 square feet depending upon building
size and local demographic factors. Sites purchased by the Partnership are in
locations zoned for commercial use which have been reviewed for traffic patterns
and volume.





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

State Number of Properties

California 1
Florida 3
Georgia 1
Illinois 3
Indiana 2
Maryland 1
Nebraska 1
North Carolina 1
Ohio 1
South Carolina 1
Tennessee 2
Texas 8
Washington 1
Wisconsin 1
--------------
TOTAL PROPERTIES 27
==============

Buildings. Each of the Properties owned by the Partnership, directly
and indirectly, includes a building that is one of a Restaurant Chain's approved
designs. The buildings generally are rectangular and are constructed from
various combinations of stucco, steel, wood, brick and tile. The sizes of the
buildings owned by the Partnership ranged from approximately 2,100 to 11,300
square feet. All buildings on Properties acquired by the Partnership are
freestanding and surrounded by paved parking areas. Buildings are suitable for
conversion to various uses, although modifications may be required prior to use
for other than restaurant operations. As of December 31, 2002, the Partnership
had no plans for renovation of the Properties. Depreciation expense is computed
for buildings and improvements using the straight line method using a
depreciable life of 40 years for federal income tax purposes.

As of December 31, 2002, the aggregate cost of the Properties owned by
the Partnership and joint ventures (including Properties owned through tenancy
in common arrangements) for federal income tax purposes was $17,341,796 and
$13,396,933, respectively.

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

Restaurant Chain Number of Properties

Arby's 4
Bennigan's 1
Black-eyed Pea 1
Boston Market 1
Burger King 5
Denny's 1
Fazoli's 1
Golden Corral 4
Jack in the Box 3
Taco Bell 1
Taco Cabana 3
Texas Roadhouse 1
Wendy's 1
--------------
TOTAL PROPERTIES 27
==============






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

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

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

As of December 31, 2002, 2001, 2000, 1999, and 1998 the Properties were
100%, 96%, 92%, 93%, and 100% occupied, respectively. The following is a
schedule of the average rent per Property for the years ended December 31:



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

Rental Income(1)(2) $ 2,359,096 $ 2,357,917 $ 2,353,394 $ 2,667,611 $ 2,983,830
Properties(2) 27 26 26 29 28
Average Rent per Property $ 87,374 $ 90,689 $ 90,515 $ 91,987 $ 106,565



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

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

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



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

2003 -- $ -- --
2004 -- -- --
2005 -- -- --
2006 -- -- --
2007 -- -- --
2008 -- -- --
2009 -- -- --
2010 -- -- --
2011 3 438,398 16.90%
2012 1 44,602 1.72%
Thereafter 23 2,110,476 81.38%
-------- ----------------- -------------
Total (1) 27 $ 2,593,476 100.00%
======== ================= =============


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

Golden Corral Corporation leases four Golden Corral restaurants. The
initial term of each lease is 15 years (three leases expiring in 2011 and one
lease in 2015) and the average minimum base annual rent is approximately
$156,000 (ranging from approximately $107,600 to $190,000).

National Restaurant Enterprises, Inc. leases three Burger King
restaurants. The initial term of each lease is 20 years (expiring between 2016
and 2017) and the average minimum base annual rent is approximately $140,400
(ranging from approximately $123,200 to $153,600).

RTM, Inc. leases three Arby's Restaurants. The initial term of each
lease is 20 years (expiring in 2016) and the average minimum base annual rent is
approximately $89,300 (ranging from approximately $86,100 to $91,900).


Item 3. Legal Proceedings

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


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

Not applicable.

PART II


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

(a) As of March 10, 2003, there were 1,633 holders of record of the Units.
There is no public trading market for the Units, and it is not anticipated that
a public market for the Units will develop. During 2002, Limited Partners who
wished to sell their Units may have offered the Units for sale pursuant to the
Partnership's distribution reinvestment plan (the "Plan"), and Limited Partners
who wished to have their distributions used to acquire additional Units (to the
extent Units were available for purchase), may have done so pursuant to such
Plan. The General Partners have the right to prohibit transfers of Units. From
inception through December 31, 2002, the price paid for any Unit transferred
pursuant to the Plan ranged from $9.14 to $9.50 per Unit. The price paid for any
Unit transferred other than pursuant to the Plan was subject to negotiation by
the purchaser and the selling Limited Partner. The Partnership will not redeem
or repurchase Units.

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



2002 2001
-------------------------------------- -------------------------------------
High Low Average High Low Average
--------- ---------- ---------- --------- ---------- ----------

First Quarter $7.00 $ 6.00 $ 6.67 (2) (2) (2)
Second Quarter 7.50 6.75 7.13 $6.70 $ 6.50 $ 6.57
Third Quarter 7.35 6.57 7.12 6.61 6.42 6.50
Fourth Quarter 9.30 6.84 8.07 9.57 6.10 7.84


(1) A total of 11,400 and 14,880 Units were transferred other than pursuant
to the Plan for the years ended December 31, 2002 and 2001,
respectively.

(2) No transfer of Units took place during the quarter other than pursuant
to the Plan.

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

For each of the years ended December 31, 2002 and 2001, the Partnership
declared cash distributions of $2,400,000 to the Limited Partners. Distributions
of $600,000 were declared at the close of each of the Partnership's calendar
quarters during 2002 and 2001 to the Limited Partners. These amounts include
monthly distributions made in arrears for the Limited Partners electing to
receive such distributions on this basis. No amounts distributed to partners for
the years ended December 31, 2002 and 2001, are required to be or have been
treated by the Partnership as a return of capital for purposes of calculating
the Limited Partners' return on their adjusted capital contributions. No
distributions have been made to the General Partners to date.

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

(b) Not applicable.


Item 6. Selected Financial Data



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

Year ended December 31:
Continuing Operations (2):
Revenues (1) $ 1,813,187 $1,793,793 $ 1,954,295 $2,462,023 $2,633,953
Equity in earnings of joint
ventures 543,978 (136,021 ) 176,088 182,132 140,595
Income from continuing
operations (1) 1,334,957 1,271,562 406,424 1,624,849 2,176,346

Discontinued Operations (2):
Revenues 128,903 271,532 341,496 230,740 234,132
Income (loss) from
discontinued operations (3) 391,155 (302,366 ) 266,714 214,420 217,812

Net income 1,726,112 969,196 673,138 1,839,269 2,394,158

Net income (loss) per Unit:
Continuing operations $ 0.45 $ 0.42 $ 0.13 $ 0.54 $ 0.73
Discontinued operations 0.13 (0.10 ) 0.09 0.07 0.07
-------------- -------------- -------------- ------------- -------------
Total $ 0.58 $ 0.32 $ 0.22 $ 0.61 $ 0.80
============== ============== ============== ============= =============

Cash distributions declared $ 2,400,000 $2,400,000 $ 2,400,000 $2,400,000 $ 2,400,000
Cash distributions declared per
Unit 0.80 0.80 0.80 0.80 0.80

At December 31:
Total assets $22,563,535 $23,194,348 $24,675,610 $26,561,963 $27,365,705
Partners' capital 21,838,076 22,511,964 23,942,768 25,669,630 26,230,361


(1) Income from continuing operation for the years ended December 31, 2002,
2001, 2000 and 1999 includes $456,000, $39,576, $1,079,275 and $232,140
from provisions for write-down of assets, respectively, and for the
years ended December 31, 2001 and 2000, it includes $310,979 and
$17,447 from gain on sale of assets, respectively. Income from
continuing operation for the year ended December 31, 1999 includes
$82,914 from loss on dissolution of joint venture.

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

(3) Income from discontinued operations for the years ended December 31,
2001 and 2000 includes $465,915 and $28,644 from provisions for
write-down of assets, respectively, and for the year ended December 31,
2002, it includes $285,677 from gain on sale of assets.

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


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

The Partnership was organized on February 10, 1995, to acquire for
cash, either directly or through joint venture arrangements, both newly
constructed and existing restaurant Properties, as well as land upon which
restaurant Properties were to be constructed, which are leased primarily to
operators of selected national and regional fast-food, family-style and casual
dining Restaurant Chains. The leases are generally triple-net leases, with the
lessees generally responsible for all repairs and maintenance, property taxes,
insurance and utilities. The leases provide for minimum base annual rental
amounts (payable in monthly installments) ranging from approximately $63,000 to
$246,400. The majority of the leases provide for percentage rent, based on sales
in excess of a specified amount. In addition, some of the leases provide that,
commencing in specified lease years (generally the sixth lease year), the annual
base rent required under the terms of the lease will increase.

As of December 31, 2000, 2001 and 2002, the Partnership owned 21, 18,
and 16 Properties directly, respectively. In addition, the Partnership owned
seven, nine, and eleven Properties indirectly through joint venture or tenancy
in common arrangements as of December 31, 2000, 2001 and 2002, respectively.

Capital Resources

For the years ended December 31, 2002, 2001 and 2000, cash from
operating activities was $2,259,664, $1,784,443 and $1,846,222, respectively.
The increase in cash from operating activities during 2002, as compared to 2001,
and the decrease in cash from operating activities during 2001, as compared to
2000, resulted from changes in the Partnership's working capital and changes in
income and expenses.

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

In January 2000, the Partnership reinvested the majority of the
proceeds from the liquidating distribution received from the dissolution of
CNL/GC El Cajon Joint Venture in a Baker's Square Property in Wilmette,
Illinois. The Partnership acquired the Property from an affiliate of the General
Partners. The affiliate had purchased and temporarily held title to the Property
in order to facilitate the acquisition of the Property by the Partnership. The
purchase price paid by the Partnership represented the costs incurred by the
affiliate to acquire the Property.

In September 2000, the Partnership sold its Popeye's Property in Warner
Robins, Georgia to a third party for a total of $609,861 and received net sales
proceeds of approximately $607,400, resulting in a gain of $17,447. In addition,
in October 2000, the Partnership sold its Boston Market Property in Long Beach,
California, and received net sales proceeds of approximately $530,000. Since the
Partnership recorded a provision for write-down of assets of $353,622 for this
Property in 2000, no gain or loss was recognized on the sale.

In January 2001, the Partnership sold its Property in Houston, Texas to
a third party and received net sales proceeds of approximately $782,700,
resulting in a gain of $4,284. The Partnership used the net sales proceeds to
acquire an interest in CNL VII and XVII Lincoln Joint Venture, and to make
distributions to the Limited Partners.

In April 2001, the Partnership reinvested the net sales proceeds from
the sales of the Properties in Warner Robins, Georgia; Long Beach, California,
and Houston Texas, in a joint venture arrangement, CNL VII & XVII Lincoln Joint
Venture, with CNL Income Fund VII, Ltd., a Florida limited partnership and an
affiliate of the General Partners. The joint venture holds one Property. The
joint venture acquired this Property from CNL BB Corp., an affiliate of the
General Partners, who had purchased and temporarily held title to the Property
in order to facilitate the acquisition of the Property by the joint venture. The
Partnership contributed approximately $1,496,700 to the joint venture. As of
December 31, 2002, the Partnership owned an 86% interest in the profits and
losses of the joint venture.

In June 2001, the Partnership sold the Property in Kentwood, Michigan,
received net sales proceeds of approximately $681,200 and recorded a loss of
$38,877. In July 2001, the Partnership used a portion of these net sales
proceeds to acquire an interest in a Property in Waldorf, Maryland, as
tenants-in-common with CNL Income Fund VI, Ltd. and CNL Income Fund IX, Ltd.,
each of which is a Florida limited partnership and an affiliate of the General
Partners. As of December 31, 2002, the Partnership contributed approximately
$570,100 for a 25% interest in the profits and losses of the Property.

In September 2001, the Partnership sold the Property in Inglewood,
California to a third party for $300,000 and received net sales proceeds of
approximately $298,300. Since the Partnership had recorded a provision for
write-down of this Property in 2001, no additional gain or loss was recognized
on the sale. The Partnership used the majority of the net sales proceeds to pay
liabilities of the Partnership.

In September 2001, the Partnership also sold its Property in El Dorado,
California to a third party and received net sales proceeds of approximately
$1,510,500, resulting in a gain of $345,572. In December 2001, the Partnership
reinvested the majority of net sales proceeds received in a Property in Austin,
Texas. The Partnership acquired the Property from an affiliate of the General
Partners. The affiliate had purchased and temporarily held title to the Property
in order to facilitate the acquisition of the Property by the Partnership. The
purchase price paid by the Partnership of approximately $1,216,600 represented
the costs incurred by the affiliate to acquire the Property. The General
Partners believe that the transaction, or a portion thereof, relating to the
sale of the Property and the reinvestment of the proceeds qualified as a
like-kind exchange transaction for federal income tax purposes. The Partnership
used the remaining net sales proceeds to pay liabilities of the Partnership.

In February 2002, a tenant, Sybra, Inc., filed for bankruptcy. In 2002,
the Partnership continued to receive rental payments relating to the Property in
Zephyrhills, Florida, held with an affiliate of the General Partners, as
tenants-in-common. In December 2002, Sybra, Inc. was acquired by Triarc
Companies, Inc. and emerged from bankruptcy. The lease relating to the Property
in Zephyrhills, Florida was affirmed.

In March 2002, the Partnership sold its Denny's Property in Mesquite,
Nevada, to a third party and received net sales proceeds of approximately
$771,800. Since the Partnership had recorded provisions for write-down of assets
in prior years for this Property, no gain or loss was recognized in 2002
relating to the sale. The provision represented the difference between the
carrying value of the Property and its estimated fair value.

In May and June 2002, the Partnership sold its Properties in Knoxville,
Tennessee and Wilmette, Illinois to third parties and received total net sales
proceeds of approximately $2,727,800 resulting in a total gain of approximately
$285,700.

In June 2002, the Partnership reinvested the majority of the net sales
proceeds, it received from the sale of the Properties in Mesquite, Nevada and
Knoxville, Tennessee, in a Taco Cabana Property located in Houston, Texas, at an
approximate cost of approximately $1,364,200.

In addition in June 2002, the Partnership reinvested a portion of the
net sales proceeds from the sale of the Property in Mesquite, Nevada in a joint
venture arrangement, Katy Joint Venture, with CNL Income Fund IX, Ltd., a
Florida limited partnership and an affiliate of the General Partners. The joint
venture acquired a Property in Katy, Texas. The Partnership and CNL Income Fund
IX, Ltd. entered into an agreement whereby each co-venturer will share in the
profits and losses of the Property in proportion to its applicable percentage
interest. As of December 31, 2002, the Partnership had contributed approximately
$416,700 for a 40% interest in this joint venture.

The Partnership and Katy Joint Venture acquired the Properties in
Houston and Katy, Texas from CNL Funding 2001-A, LP, a Delaware limited
partnership and an affiliate of the General Partners. CNL Funding 2001-A, LP had
purchased and temporarily held title to the Properties in order to facilitate
the acquisition of the Properties by the Partnership and the joint venture. The
purchase prices paid by the Partnership and the joint venture represented the
costs incurred by CNL Funding 2001-A, LP to acquire and carry the Properties.
The General Partners believe that the transactions, or a portion thereof,
relating to the sales of the Properties and the reinvestment of the proceeds
will qualify as like-kind exchange transactions for federal income tax purposes.

In August 2002, the Partnership reinvested the net sales proceeds from
the sale of the Property in Wilmette, Illinois in a Property in Kenosha,
Wisconsin as tenants-in-common with CNL Income Fund VIII, Ltd. ("CNL VIII"), a
Florida limited partnership and an affiliate of the General Partners, at an
approximate cost of $1,883,000. The Partnership and CNL VIII entered into an
agreement whereby each co-tenant will share in the profits and losses of the
Property in proportion to its applicable percentage interest in the Property. As
of December 31, 2002, the Partnership contributed approximately $1,694,700 for a
90% interest in this Property. The General Partners believe that the
transactions, or portion thereof, relating to the sale of the Property and the
reinvestment of the net sales proceeds, or a portion thereof, will qualify as a
like-kind exchange transaction for federal income tax purposes.

In August 2002, Mansfield Joint Venture, in which the Partnership owns
a 21% interest, sold its Property in Mansfield, Texas to the tenant and received
net sales proceeds of approximately $1,011,500 resulting in a gain of
approximately $296,800. The joint venture used the proceeds from the sale of the
Property and additional contributions from the Partnership and CNL Income Fund
VII, Ltd., who are the general partners of the joint venture, of approximately
$17,000 and $63,900, respectively, to acquire a Property in Arlington, Texas
from CNL Net Lease Investors, L.P. ("NLI"), at an approximate cost of
$1,089,900. During 2002, and prior to the joint venture's acquisition of this
Property, CNL Financial LP Holding, LP ("CFN"), a Delaware limited partnership,
and CNL Net Lease Investors GP Corp. ("GP Corp"), a Delaware corporation,
purchased the limited partner's interest and general partner's interest,
respectively, of NLI. Prior to this transaction, an affiliate of the
Partnership's General Partners owned a 0.1% interest in NLI and served as a
general partner of NLI. The original general partners of NLI waived their rights
to benefit from this transaction. The acquisition price paid by CFN for the
limited partner's interest was based on the portfolio acquisition price. The
joint venture acquired the Property in Arlington, Texas at CFN's cost and did
not pay any additional compensation to CFN for the acquisition of the Property.
Each CNL entity is an affiliate of the Partnership's General Partners. The
General Partners believe that the transactions, or portion thereof, relating to
the sale of the Property and the reinvestment of the net sales proceeds, or a
portion thereof, will qualify as a like-kind exchange transaction for federal
income tax purposes.

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

Currently, rental income from the Partnership's Properties are invested
in short-term highly liquid investments such as demand deposit accounts at
commercial banks, money market accounts and certificates of deposit with less
than a 90-day maturity date, pending use of such funds to pay Partnership
expenses, or to make distributions to partners. At December 31, 2002, the
Partnership had $829,739 invested in such short-term investments as compared to
$673,924 at December 31, 2001. The increase in cash and cash equivalents at
December 31, 2002, as compared to December 31, 2001, was primarily due to the
fact that approximately $297,300 in restricted cash remaining from the net sales
proceeds relating to the sale of its Property in El Dorado, California were
released from restricted cash to cash and cash equivalents. As of December 31,
2002, the average interest rate earned by the Partnership on the rental income
deposited in demand deposit accounts at commercial banks was approximately one
percent annually. The funds remaining at December 31, 2002, after payment of
distributions and other liabilities, will be used to invest in an additional
Property, and to meet the Partnership's working capital needs.

Short-Term Liquidity

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

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

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

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

The Partnership generally distributes cash from operations remaining
after the payment of the operating expenses of the Partnership, to the extent
that the General Partners determine that such funds are available for
distribution. Based on current and future cash from operating activities, the
Partnership declared distributions to the Limited Partners of $2,400,000 for
each of the years ended December 31, 2002, 2001 and 2000. This represents
distributions of $0.80 per Unit for each of the years ended December 31, 2002,
2001 and 2000. No distributions were made to the General Partners for the years
ended December 31, 2002, 2001 and 2000. No amounts distributed to the Limited
Partners for the years ended December 31, 2002, 2001 and 2000 are required to be
or have been treated by the Partnership as a return of capital for purposes of
calculating the Limited Partners' return on their adjusted capital
contributions. The Partnership intends to continue to make distributions of cash
available for distribution to Limited Partners on a quarterly basis.

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

As of December 31, 2002 and 2001, the Partnership owed $26,600 and
$11,582, respectively, to affiliates for operating expenses, accounting and
administrative services, and management fees. As of March 15, 2003, the
Partnership had reimbursed the affiliates for these amounts. Other liabilities,
including distributions payable, increased to $698,859 at December 31, 2002,
from $670,802 at December 31, 2001. The general partners believe that the
Partnership has sufficient cash on hand to meet its current working capital
needs.

Long-Term Liquidity

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

Critical Accounting Policies

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

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

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

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

Results of Operations

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

Total rental revenues were $1,794,199 for the year ended December 31,
2002 as compared to $1,736,074 in the same period in 2001. The increase in
rental revenues during 2002, as compared to the same period in 2001, was due to
the fact the Partnership reinvested the majority of the net sales proceeds from
the 2001 and 2002 sale of the Properties in El Dorado, California; Mesquite,
Nevada and Wilmette, Illinois, in Properties in Austin and Houston, Texas. The
increase in rental revenues during 2002, as compared to the same period in 2001,
was partially offset by the fact that the Partnership sold the Property in El
Dorado, California in 2001.

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

During the years ended December 31, 2002 and 2001, the Partnership
recognized income of $543,978 and a loss of $136,021, respectively, attributable
to the net operating results reported by joint ventures. Net operating results
reported by joint ventures were lower during 2001, as compared to the same
period in 2002, because PRG, the tenant of the Property in Corpus Christi,
Texas, experienced financial difficulties and ceased paying rent in 2001. As a
result, the Partnership and an affiliate of the General Partners, as
tenants-in-common, in which the Partnership owns an approximate 27% interest,
stopped recording rental revenues The tenancy in common also incurred Property
related expenses such as, legal fees, insurance and real estate taxes relating
to this Property. In addition, the Partnership and the affiliate, as
tenants-in-common of this Property, recorded during 2001 a provision for
write-down of assets of approximately $356,700 relating to this Property. The
provision represented the difference between the carrying value of the Property
and its estimated fair value. In addition, the Partnership and the affiliate, as
tenants-in-common of this Property, recorded during 2001 a provision for
write-down of assets of approximately $327,300 relating to this Property. The
provision represented the difference between the carrying value of the Property
and its estimated fair value. In October 2001, PRG filed for Chapter 11
bankruptcy protection. Since the bankruptcy filing, the tenant resumed paying
rent. The Partnership and the affiliate, as tenants-in-common, received from PRG
the rent payments relating to this Property from the bankruptcy date through
April 2002. During April 2002, the bankruptcy court assigned its lease to a new
tenant, an affiliate of the General Partners which has continued to pay rent
pursuant to the lease. All other lease terms remained unchanged and are
substantially the same as the Partnership's other leases. As a result of the
assignment relating to this Property, the Partnership collected from the new
tenant $309,700 in rents not collected in 2001 from the previous tenant.

In addition, the operating results reported by joint ventures were
lower during 2001, as compared to the same period in 2002, because Ocean Shores
Joint Venture, in which the Partnership owns an approximate 31% interest,
recorded a provision for write down of assets of approximately $781,700 in 2001.
The provision represented the difference between the carrying value of the
Property and its estimated fair value. The tenant of the Property owned by this
joint venture experienced financial difficulties and vacated the Property in
April 2001. During 2002, the joint venture has not recorded rental revenues
relating to this Property. The joint venture will continue to pursue collection
of these past due rents and is seeking a new tenant for the Property.

The increase in net operating results reported by joint ventures during
2002, as compared to the same period in 2001, was also the result of the
Partnership investing during 2001 and 2002 the majority of the net proceeds from
the sales of Warner Robins, Georgia; Long Beach, California; Kentwood, Michigan;
Mesquite, Nevada; and Wilmette, Illinois; in two joint ventures and two
additional Properties, each as a separate tenancy in common with affiliates of
the General Partners.

In August 2002, Mansfield Joint Venture, in which the Partnership owns
a 21% interest, sold the Property in Mansfield, Texas, and reinvested the net
sales proceeds in a Property in Arlington, Texas.

During the year ended December 31, 2002, three lessees of the
Partnership, Golden Corral Corporation, National Restaurant Enterprises, Inc.,
and RTM Indianapolis, Inc. and RTM Southwest Texas, Inc. (which are affiliated
entities under common control) (hereinafter referred as "RTM, Inc."), each
contributed more than ten percent of the Partnership's total rental revenues
(including rental revenues from the Partnership's share of rental income from
Properties owned by joint ventures and Properties owned with separate affiliates
of the General Partners as tenants-in-common). As of December 31, 2002, Golden
Corral Corporation was the lessee under leases relating to four restaurants, and
National Restaurant Enterprises, Inc. and RTM, Inc., were each the lessee under
leases relating to three restaurants. It is anticipated that based on the
minimum rental payments required by the leases, these three lessees each will
continue to contribute more than ten percent of the Partnership's total rental
revenues in 2003. In addition, three Restaurant Chains, Golden Corral, Burger
King, and Arby's, each accounted for more than ten percent of the Partnership's
total rental revenues during the year ended December 31, 2002 (including rental
revenues from the Partnership's share of rental income from Properties owned by
joint ventures and Properties owned with separate affiliates of the General
Partners as tenants-in-common). In 2003, it is anticipated that each of these
three Restaurant Chains will continue to contribute more than ten percent of the
Partnership's rental revenues to which the Partnership is entitled under the
terms of the leases. Any failure of these lessees or Restaurant Chains could
have a material adverse affect on the Partnership's income if the Partnership is
not able to re-lease or sell the Properties in a timely manner.

During the years ended December 31, 2002 and 2001, the Partnership also
earned $18,988 and $57,719, respectively, in interest and other income. During
2001, interest and other income were higher as compared to the same period in
2002 due to the Partnership recognizing as income the remainder of the security
deposit from a former tenant of a Property in Houston, Texas, in accordance with
the lease agreement. The tenant had rejected the lease, and the Partnership sold
the Property in January 2001. In addition, interest and other income were higher
during 2001, as compared to the same period in 2002, primarily due to higher
average cash balances during 2001 pending reinvestment in an additional income
producing Property and payment of the liabilities of the Partnership.

Operating expenses, including depreciation and amortization expense and
provision for write-down of assets, were $1,022,208 and $697,189 for the years
ended December 31, 2002 and 2001, respectively. The increase in operating
expenses during 2002, as compared to the same period in 2001, was due to the
recording of provisions for write-down of assets in the amount of $456,000
relating to the Properties in Harvey and Chicago Ridge, Illinois, as a result of
AmeriKing Corporation, the parent company to National Restaurant Enterprises,
Inc. which is the tenant of these Properties, filing for bankruptcy protection,
as described above. The provision represented the difference between the
carrying value of the Properties and their estimated fair value.

The increase in operating expenses during 2002 was also partially due
to an increase in depreciation expense as a result of Property acquisitions and
the reclassification of the lease relating to the Property in Muncie, Indiana
from direct financial leases to operating leases due to an amendment to the
lease.

The increase in operating expenses during 2002, as compared to the same
period in 2001, was partially offset by a decrease in the costs incurred for
administrative expenses for servicing the Partnership and its Properties, a
decrease in Property expenses such as legal fees and real estate taxes relating
to several Properties with tenants that experienced financial difficulties in
2001, and a decrease in state taxes. The higher state taxes in 2001, were the
result of changes in tax laws of a state in which the Partnership conducts
business.

During 2001, the Partnership recorded provisions for write-down of
assets in the amount of $39,576 relating to the Property in Inglewood,
California. The tenant of this Property was experiencing financial difficulties.
The provision represented the difference between the carrying value of the
Property and its estimated fair value. In September 2001, the Partnership sold
the Property in Inglewood, California to a third party. Since the Partnership
had previously recorded a provision for write-down for this Property, no
additional gain or loss was recognized during 2001 relating to the sale of the
Property.

During 2001, the Partnership sold a Property in Houston, Texas
resulting in a gain of $4,284, a Property in El Dorado, California resulting in
a gain of $345,572 and a Property in Kentwood, Michigan resulting in a loss of
$38,877.

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

During 2002, the Partnership identified and sold the Properties located
in Mesquite, Nevada; Knoxville, Tennessee; and Wilmette, Illinois, all of which
met the criteria of this standard. In October 2001, Phoenix Restaurant Group,
Inc. and its subsidiaries, a tenant of the Partnership, filed for bankruptcy
protection and rejected the lease relating to the property in Mesquite, Nevada.
In March 2002, the Partnership sold the Property to a third party. Since the
Partnership had recorded provisions for write-down of assets of $465,915 and
$28,644 during the years 2001 and 2000, respectively. No gain or loss was
recognized in 2002 relating to the sale. In May and June 2002, the Partnership
sold its properties in Knoxville, Tennessee and Wilmette, Illinois to third
parties resulting in a total gain of approximately $285,700. The financial
results of these Properties were classified as Discontinued Operations in the
accompanying financial statements. The majority of the net sales proceeds from
the sales of these Properties were reinvested in three Properties, one owned
directly by the Partnership and the other two owned indirectly through a tenancy
in common and a joint venture.

During 2002, CNL Mansfield Joint Venture, in which the Partnership owns
a 21% interest, identified and sold a Property that met the criteria of this
standard. In August 2002, the joint venture sold the property in Mansfield,
Texas to the tenant resulting in a gain of approximately $269,800. The financial
results of this Property were classified as Discontinued Operations in the
condensed financial information for the unconsolidated joint ventures and the
properties held as tenants-in-common with affiliates presented in the footnotes
to the accompanying financial statements. The joint venture reinvested the net
sales proceeds from the sale of this Property in an additional income producing
Property.

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

Total rental revenues were $1,736,074 for the year ended December 31,
2001 as compared to $1,893,111 in the same period in 2000. The decrease in
rental revenues during 2001, as compared to 2000, was primarily attributable to
the sale of two Properties in 2001 and one Property in 2000. During 2001 and
2000, the Partnership reinvested in a Property in Austin, Texas and in a
Property in Wilmette, Illinois, respectively, and recognized rental revenues of
approximately $24,100, which partially offset the decrease in revenues during
2001.

In addition, during 2000, the Partnership stopped recording rental
revenues relating to a Denny's Property in Mesquite, Nevada and a Mr. Fable's
Property in Kentwood, Michigan because the tenant was experiencing financial
difficulties. In June 2001, the Partnership sold the Property in Kentwood,
Michigan. On October 31, 2001, Phoenix Restaurant Group, Inc. and its
Subsidiaries (collectively referred to as "PRG"), the tenant of the remaining
lease relating to the Property in Mesquite, Nevada, filed for Chapter 11
bankruptcy protection. As a result of the bankruptcy filing, PRG rejected this
lease. The Partnership sold the Property in Mesquite, Nevada in March 2002.

During the years ended December 31, 2001 and 2000, the Partnership
recognized a loss of $136,021 and income of $176,088, respectively, attributable
to the net operating results reported by joint ventures. Net operating results
from joint ventures decreased during 2001, as compared to 2000, because the
Partnership and an affiliate of the General Partners, as tenants-in-common of
the Property in Corpus Christi, Texas, stopped recording rental revenues due to
PRG's financial difficulties, as described above. In addition, the tenancy in
common recorded a provision for write-down of assets of $356,719. The provision
represented the difference between the carrying value of the property, and its
estimated fair value. The tenancy in common also incurred approximately $58,400
in real estate taxes during 2001 relating to this Property. The Partnership owns
an approximate 27% interest on this Property. In October 2001, PRG filed for
Chapter 11 bankruptcy protection, and resumed paying rent.

Net income earned by joint ventures also decreased during 2001, as
compared to 2000 because Ocean Shores Joint Venture, in which the Partnership
owns an approximate 31%, stopped recording rental revenues during 2001, due to
financial difficulties of the tenant. The tenant of the Property owned by the
joint venture ceased operations and vacated the Property in April 2001. In
addition, during 2001, the joint venture recorded a provision for write-down of
assets of $781,741, as described above. The provision represented the difference
between the carrying value of the Property and its estimated fair value.

The decrease in net income earned by joint ventures in 2001, as
compared to 2000, was partially offset by an increase of approximately $123,800
during 2001 as a result of the Partnership investing during 2001 in CNL VII and
XVII Lincoln Joint Venture, and in a Property in Waldorf, Maryland, as
tenants-in-common with CNL Income Fund VI, Ltd. and CNL Income Fund IX, Ltd,
each an affiliate of the General Partners.

During the years ended December 31, 2001 and 2000, the Partnership also
earned $57,719 and $61,184, respectively, in interest and other income.

Operating expenses, including depreciation and amortization expense and
provision for write-down of assets, were $697,189 and $1,741,406 for the years
ended December 31, 2001 and 2000, respectively. Operating expenses were higher
in 2000 because the Partnership recorded approximately $1,079,000 in provisions
for write-down of assets, as described below. The provisions for write-down
recorded represented the difference between the carrying values of the
properties and their estimated fair values.

During 2000, the Partnership recorded a provision for write-down of
assets in the amount of $35,127 relating to the Properties in Houston, Texas. In
October 1998, the tenant of this Property filed for bankruptcy, and in July 2000
rejected the lease. The Partnership sold this Property in January 2001.

As of December 31, 2000, the Partnership recorded a provision for
write-down of assets of $28,644 relating to the Property in Mesquite, Nevada.
The tenant of this Property was experiencing financial difficulties. As a result
of the PRG bankruptcy, as of October 2001, the Partnership increased the
provision for write-down of assets by $201,002 to $229,646. During December
2001, the Partnership increased the provision for write-down of assets by
$264,914 to $464,560. The increase in the provision represented the difference
between the carrying value of the Property, and the estimated net sales proceeds
from the anticipated sale of the Property. The Property sold in March 2002.

During 2000, the Partnership also recorded provisions for write-down of
assets of $193,464 and $19,091 relating to the properties in Kentwood, Michigan
and Pensacola, Florida. The tenant of these Properties was experiencing
financial difficulties. In 2001, the Partnership sold the Property in Kentwood
Michigan, and the tenant assigned its lease relating to the Property in
Pensacola, Florida to Denny's, Inc.

In addition, in 2000, the Partnership increased the provision for
write-down of assets for the Properties in Long Beach and Inglewood, California
by $353,622 to $388,573 and by $477,971 to $502,664, respectively. The
Partnership had recorded provisions for these Properties amounting to $34,951
and $24,693, respectively, during 1999 because the tenant of both Properties had
filed for bankruptcy in 1998 and rejected the leases in 1999. The additional
provisions represented the differences between each Properties carrying value
and their estimated fair value. The Partnership sold the Property in Long Beach,
California in October 2000. During 2001, the Partnership increased the provision
for write-down of assets for the Property in Inglewood, California by an
additional $39,575 based on a pending sales contract. The Partnership sold this
Property in September 2001.

During 2000, the Partnership incurred certain expenses, such as legal
fees, real estate taxes, insurance, and maintenance relating to the Properties
in Houston, Texas and Long Beach and Inglewood, California, whose leases were
rejected by the tenant, and the Properties in Mesquite, Nevada, Kentwood,
Michigan and Pensacola, Florida, whose tenant was having financial difficulties.
In 2001, the lease relating to the Property in Pensacola, Florida was assigned
to a new tenant, and in 2002, 2001 and 2000, the Partnership sold the other five
Properties, as described above. Therefore, the Partnership will not continue to
incur these expenses for these Properties.

The decrease in operating expenses during 2001, as compared to 2000,
was also partially due to a decrease in depreciation expense due to the fact
that the Partnership sold five Properties between 2000 and 2001. The decrease in
operating expenses during 2001 was partially offset by higher state taxes in a
state in which the Partnership conducts business and due to an increase in the
costs incurred for administrative expenses for servicing the Partnership and its
Properties, as permitted by the Partnership agreement.

During 2000, the Partnership incurred approximately $18,700 in
transaction costs related to the General Partners retaining financial and legal
advisors to assist them in evaluating and negotiating the proposed merger with
CNL American Properties Fund, Inc. ("APF"). In June 1999, the General Partners
and APF mutually agreed to terminate the merger.

During 2001, the Partnership sold the Properties in Houston, Texas and
El Dorado, California, and recorded gains of $4,284 and of $345,572,
respectively. The Partnership also sold the Property in Kentwood, Michigan and
recorded a loss of $38,877. In addition, during September 2000, the Partnership
sold the Property in Warner Robins, Georgia resulting in a gain of $17,447.

The financial results reported as discontinued operations relate to the
Properties located in Mesquite, Nevada; Knoxville, Tennessee and Wilmette,
Illinois, which were sold during 2002 and met the reporting criteria of FAS 144.
During 2000, the Partnership recorded a provision for write-down of assets of
$28,644 for the Property in Mesquite, Nevada because the tenant was experiencing
financial difficulties. During 2001, the Partnership recorded $465,915 because
the tenant filed for bankruptcy and rejected the lease. The increase in
provisions for write-down represented the difference between the carrying value
of the Property and its estimated fair value based on a pending sales contract.

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

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

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





Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.


Item 8. Financial Statements and Supplementary Data







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

CONTENTS








Page

Report of Independent Certified Public Accountants 21

Financial Statements:

Balance Sheets 22

Statements of Income 23

Statements of Partners' Capital 24

Statements of Cash Flows 25-26

Notes to Financial Statements 27-42


















Report of Independent Certified Public Accountants




To the Partners
CNL Income Fund XVII, Ltd.


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

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




/s/ PricewaterhouseCoopers LLP

Orlando, Florida
January 31, 2003




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

BALANCE SHEETS




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

ASSETS

Real estate properties with operating leases, net $ 15,022,053 $ 13,864,015
Net investment in direct financing leases 410,120 988,429
Real estate held for sale -- 3,218,833
Investment in joint ventures 5,749,285 3,658,974
Cash and cash equivalents 829,739 673,924
Restricted cash -- 297,288
Receivables, less allowance for doubtful
accounts of $286,567 in 2001 36,516 2,709
Due from related parties 490 19,289
Accrued rental income 502,962 465,033
Other assets 12,370 5,854
----------------- ------------------

$ 22,563,535 $ 23,194,348
================= ==================



LIABILITIES AND PARTNERS' CAPITAL

Accounts payable and accrued expenses $ 3,494 $ 8,974
Real estate taxes payable 13,457 --
Distributions payable 600,000 600,000
Due to related parties 26,600 11,582
Rents paid in advance 31,910 8,350
Deferred rental income 49,998 53,478
----------------- ------------------
Total liabilities 725,459 682,384

Partners' capital 21,838,076 22,511,964
----------------- ------------------

$ 22,563,535 $ 23,194,348
================= ==================

See accompanying notes to financial statements.




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

STATEMENTS OF INCOME



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

Revenues:
Rental income from operating leases $ 1,732,028 $ 1,637,035 $ 1,791,426
Earned income from direct financing leases 62,171 99,039 101,685
Interest and other income 18,988 57,719 61,184
---------------- --------------- ----------------
1,813,187 1,793,793 1,954,295
---------------- --------------- ----------------
Expenses:
General operating and administrative 207,363 245,622 140,179
Property expenses 6,544 59,765 117,054
Management fee to related party 24,452 21,315 22,591
State and other taxes 9,258 34,733 12,064
Depreciation and amortization 318,591 296,178 351,548
Provision for write-down of assets 456,000 39,576 1,079,275
Transaction costs -- -- 18,695
---------------- --------------- ----------------
1,022,208 697,189 1,741,406
---------------- --------------- ----------------
Income Before Gain on Sale of Assets and Equity in
Earnings (Loss) of Joint Ventures 790,979 1,096,604 212,889

Gain on Sale of Assets -- 310,979 17,447

Equity in Earnings (Loss) of Joint Ventures 543,978 (136,021 ) 176,088
---------------- --------------- ----------------

Income from Continuing Operations 1,334,957 1,271,562 406,424
---------------- --------------- ----------------

Discontinued Operations (Note 5):

Income (loss) from discontinued operations 105,478 (302,366 ) 266,714
Gain (loss) on disposal of discontinued operations 285,677 -- --
---------------- --------------- ----------------
391,155 (302,366 ) 266,714
---------------- --------------- ----------------


Net income $ 1,726,112 $ 969,196 $ 673,138
================ =============== ================


Income (Loss) Per Limited Partner Unit
Continuing Operations $ 0.45 $ 0.42 $ 0.13
Discontinued Operations 0.13 (0.10 ) 0.09
---------------- --------------- ----------------

Total $ 0.58 $ 0.32 $ 0.22
================ =============== ================


Weighted Average Number of Limited Partner Units
Outstanding 3,000,000 3,000,000 3,000,000
================ =============== ================

See accompanying notes to financial statements.




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

STATEMENTS OF PARTNERS' CAPITAL

Years Ended December 31, 2002, 2001, and 2000




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

Balance, December 31, 1999 $ 1,000 $ (5,460 ) $ 30,000,000 $ (8,282,464 ) $ 7,546,554 $ (3,590,000)

Distributions to limited partners
($0.80 per limited partner unit) -- -- -- (2,400,000 ) -- --
Net income -- -- -- -- 673,138 --
------------ ------------- -------------- -------------- -------------- -------------

Balance, December 31, 2000 1,000 (5,460 ) 30,000,000 (10,682,464 ) 8,219,692 (3,590,000)

Distributions to limited partners
($0.80 per limited partner unit) -- -- -- (2,400,000 ) -- --
Net income -- -- -- -- 969,196 --
------------ ------------- -------------- -------------- -------------- -------------

Balance, December 31, 2001 1,000 (5,460 ) 30,000,000 (13,082,464 ) 9,188,888 (3,590,000)

Distributions to limited partners
($0.80 per limited partner unit) -- -- -- (2,400,000 ) -- --
Net income -- -- -- -- 1,726,112 --
------------ ------------- -------------- -------------- -------------- -------------

Balance, December 31, 2002 $ 1,000 $ (5,460 ) $ 30,000,000 $ (15,482,464 ) $ 10,915,000 $ (3,590,000)
============ ============= ============== ============== ============== =============








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

$25,669,630


(2,400,000 )
673,138
--------------

23,942,768


(2,400,000 )
969,196
--------------

22,511,964


(2,400,000 )
1,726,112
--------------

$21,838,076
==============


See accompanying notes to financial statements.


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

STATEMENTS OF CASH FLOWS




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

Increase (Decrease) in Cash and Cash Equivalents:
Cash Flows from Operating Activities:

Net income $ 1,726,112 $ 969,196 $ 673,138
--------------- ---------------- ----------------
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation 330,474 342,690 391,244
Amortization 4,212 4,212 4,212
Provision for write-down of assets 456,000 505,491 918,692
Equity in earnings of unconsolidated joint
ventures, net of distributions 42,015 382,447 (15,970 )
Gain on sale of assets (285,677 ) (310,979 ) (17,447 )
Decrease (increase) in receivables (36,626 ) 26,719 13,632
Decrease (increase) in due from related parties 18,799 (14,396 ) (954 )
Amortization of investment in direct financing
leases 14,085 35,649 35,011
Decrease (increase) in accrued rental income (46,289 ) (118,167 ) 18,396
Decrease (increase) in other assets (6,516 ) 12,039 (14,241 )
Increase (decrease) in accounts payable and real
estate taxes payable 7,977 (17,688 ) (62,522 )
Increase (decrease) in due to related parties 15,018 (2,237 ) (9,778 )
Increase (decrease) in rents paid in advance
and deposits 23,560 (27,053 ) (83,710 )
Decrease in deferred rental income (3,480 ) (3,480 ) (3,481 )
--------------- ---------------- ----------------
Total adjustments 533,552 815,247 1,173,084
--------------- ---------------- ----------------

Net Cash Provided by Operating Activities 2,259,664 1,784,443 1,846,222
--------------- ---------------- ----------------

Cash Flows from Investing Activities:
Additions to real estate properties with operating
leases (1,364,194 ) (1,216,598 ) (1,630,164 )
Proceeds from sale of real estate properties 3,499,595 3,272,711 1,136,991
Investment in joint ventures (2,136,538 ) (2,066,846 ) (12 )
(Increase) decrease in restricted cash 297,288 (297,288 ) --
--------------- ---------------- ----------------

Net cash provided by (used in) investing
activities 296,151 (308,021 ) (493,185 )
--------------- ---------------- ----------------

Cash Flows from Financing Activities:
Distributions to limited partners (2,400,000 ) (2,400,000 ) (2,400,000 )
--------------- ---------------- ----------------
Net cash used in financing activities (2,400,000 ) (2,400,000 ) (2,400,000 )
--------------- ---------------- ----------------

Net Increase (Decrease) in Cash and Cash Equivalents 155,815 (923,578 ) (1,046,963 )

Cash and Cash Equivalents at Beginning of Year 673,924 1,597,502 2,644,465
--------------- ---------------- ----------------

Cash and Cash Equivalents at End of Year $ 829,739 $ 673,924 $ 1,597,502
=============== ================ ================


See accompanying notes to financial statements.



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

STATEMENTS OF CASH FLOWS - CONTINUED




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

Supplemental Schedule of Non-Cash Investing and
Financing Activities:

Distributions declared and unpaid at December 31 $ 600,000 $ 600,000 $ 600,000
=============== ================ ================



See accompanying notes to financial statements.


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

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2002, 2001, and 2000


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

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

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

Real Estate and Lease Accounting - The Partnership records the real
estate property acquisitions at cost. The properties are leased to
third parties generally on a triple-net basis, whereby the tenant is
generally responsible for all operating expenses relating to the
property, including property taxes, insurance, maintenance and repairs.
During the years ended December 31, 2002, 2001 and 2000, the tenants
paid directly to real estate taxing authorities $312,800, $321,200, and
$302,500, respectively, in real estate taxes in accordance with the
terms of their triple net leases with the Partnership.

The leases of the Partnership provide for base minimum annual rental
payments payable in monthly installments. In addition, certain leases
provide for contingent rental revenues based on the tenants' gross
sales in excess of a specified threshold. The Partnership defers
recognition of the contingent rental revenues until the defined
thresholds are met. The leases are accounted for using either the
direct financing or the operating method. Such methods are described
below:

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

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





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

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2002, 2001, and 2000


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

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

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

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

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

Investment in Joint Ventures - The Partnership accounts for its
interests in CNL Kingston Joint Venture; CNL Mansfield Joint Venture;
Ocean Shores Joint Venture; CNL VII & XVII Lincoln Joint Venture; and
Katy Joint Venture; and the properties in Corpus Christi, Texas; Akron,
Ohio; Fayetteville, North Carolina; Zephyrhills, Florida; Waldorf,
Maryland; and Kenosha, Wisconsin, for which each property is held as
tenants-in-common, are accounted for using the equity method since each
joint venture agreement requires the consent of all partners on all key
decisions affecting the operations of the underlying property.

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

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

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





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

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2002, 2001, and 2000


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

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

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

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

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

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





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

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2002, 2001, and 2000


2. Real Estate Properties with Operating Leases:
--------------------------------------------

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



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

Land $ 7,131,340 $ 6,675,235
Buildings 9,647,810 8,631,497
------------------- -------------------
16,779,150 15,306,732
Less accumulated depreciation (1,757,097 ) (1,442,717 )
------------------- -------------------
$ 15,022,053 $ 13,864,015
=================== ===================


During 1999, the Partnership recorded a provision for write-down of
assets of $24,693 relating to the property in Inglewood, California.
The tenant of this Property filed for bankruptcy in October 1998, and
during 1999, rejected the lease relating to this Property. During 2000,
the Partnership increased the provision by $477,971 to $502,664. The
provisions represented the difference between the carrying value of the
Property, at December 31, 1999 and 2000 and its estimated fair value.
At June 30, 2001, the Partnership increased the provision by $39,575 to
$542,239. The adjusted provision represented the difference between the
carrying value of the property at June 30, 2001 and the net sales
proceeds anticipated to be received from the sale of the property. In
September 2001, the Partnership sold this property to a third party and
received net sales proceeds of approximately $298,300. Due to the fact
that during second quarter, the Partnership had recorded a provision
for write-down of this property, no additional gain or loss was
recognized in September 2001 relating to the sale of the property.

In addition, during 2000, the Partnership recorded a provision for
write-down of assets of $35,127 relating to the property located in
Houston, Texas because the tenant rejected the lease and ceased making
rental payments. The tenant of this Boston Market Property filed for
bankruptcy in 1998. The provision represented the difference between
the carrying value of the property and its estimated fair value. In
January 2001, the Partnership sold this property to a third party and
received net sales proceeds of approximately $782,700, resulting in a
gain of $4,284.

In 2000, the Partnership recorded a provision for write-down of assets
in the amount of $193,464, for its Property in Kentwood, Michigan. The
tenant of this Property defaulted under the terms of its lease and
ceased restaurant operations. The provision represented the difference
between the carrying value of the Property at December 31, 2000 and its
estimated fair value. In June 2001, the Partnership sold this property,
received net sales proceeds of approximately $681,200 and recorded a
loss of $38,877.

In September 2001, the Partnership also sold its property in El Dorado,
California to a third party and received net sales proceeds of
approximately $1,510,500 resulting in a gain of $345,572. In December
2001, the Partnership reinvested approximately $1,216,600 of the net
sales proceeds in a Property in Austin, Texas. The Partnership acquired
this Property from 2001-A, LP, an affiliate of the general partners.

In June 2002, the Partnership reinvested the majority of the net sales
proceeds it received from the sale of the properties in Mesquite,
Nevada and Knoxville, Tennessee, in a Taco Cabana property located in
Houston, Texas, at an approximate cost of approximately $1,364,200 from
CNL Funding 2001-A, LP, an affiliate of the general partners.





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

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2002, 2001, and 2000


2. Real Estate Properties with Operating Leases - Continued:
--------------------------------------------------------

In 2002, the Partnership recorded provisions for write-down of assets
in the amount of $456,000 relating to the Properties in Harvey and
Chicago Ridge, Illinois. In December 2002, AmeriKing Corporation, the
parent company of National Restaurant Enterprises, Inc., the tenant of
these Properties, filed for bankruptcy protection. The provision
represented the difference between the carrying value of the Properties
and their estimated fair value at December 31, 2002.

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

2003 $ 1,754,318
2004 1,786,254
2005 1,800,314
2006 1,821,153
2007 1,847,337
Thereafter 14,537,648
-----------------

$ 23,547,024
=================

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

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



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

Minimum lease payments
receivable $ 720,639 $ 1,733,118
Estimated residual values 113,894 271,355
Less unearned income (424,413 ) (1,016,044 )
-------------
--------------
Net investment in direct
financing leases $ 410,120 $ 988,429
============= ==============


During 2001, the Partnership established a provision for write-down of
assets of $111,042 for its property in Mesquite, Nevada due to the fact
that the on October 31, 2001, Phoenix Restaurant Group, Inc. and its
Subsidiaries (collectively referred to as "PRG"), a tenant of the
Partnership, filed for Chapter 11 bankruptcy protection and rejected
the lease relating to this property. The provision represented the
difference between the carrying value of the net investment in the
direct financing lease and its estimated fair value at December 31,
2001. The Partnership reclassified the rejected lease from direct
financing leases to real estate properties with operating leases. No
losses on the termination of direct financing leases were recorded.

During 2002, one of the Partnership's leases was amended. As a result,
the Partnership reclassified the building portion of the property which
was classified as a direct financing lease to real estate properties
with operating leases. No loss on the reclassification of the direct
financing lease was recorded.





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

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2002, 2001, and 2000


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

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

2003 $ 53,666
2004 53,666
2005 53,666
2006 53,666
2007 53,666
Thereafter 452,309
-----------------

$ 720,639
=================

4. Investment in Joint Ventures:
----------------------------

The Partnership has interests of 21%, 60.06% and 30.94% in the profits
and losses of CNL Mansfield Joint Venture, CNL Kingston Joint Venture
and Ocean Shores Joint Venture, respectively. The remaining interests
in these joint ventures are held by affiliates of the Partnership which
have the same general partners.

The Partnership owns properties in Fayetteville, North Carolina; Corpus
Christi, Texas; Akron, Ohio; and Zephyrhills, Florida, as
tenants-in-common with affiliates of the general partners. As of
December 31, 2002, the Partnership owned interests in these properties
of 19.56%, 27.42%, 36.91% and 24%, respectively.

In April 2001, the Partnership entered into a joint venture
arrangement, CNL VII & XVII Lincoln Joint Venture, with CNL Income Fund
VII, Ltd., a Florida limited partnership and an affiliate of the
general partners, to hold one restaurant property. The joint venture
acquired this property from CNL BB Corp., an affiliate of the general
partners. The Partnership contributed approximately $1,496,700 to the
joint venture to acquire the restaurant property. As of December 31,
2002, the Partnership owns an 86% interest in the profits and losses of
the joint venture.

In July 2001, the Partnership invested in a property in Waldorf,
Maryland as tenants-in-common with CNL Income Fund VI, Ltd. and CNL
Income Fund IX, Ltd., each of which are Florida limited partnerships
and affiliates of the general partners. As of December 31, 2002, the
Partnership contributed approximately $570,100 for a 25% interest in
the property.

In June 2002, the Partnership reinvested a portion of the net sales
proceeds from the sale of the property in Mesquite, Nevada, in a joint
venture arrangement, Katy Joint Venture, with CNL Income Fund IX, Ltd.,
a Florida limited partnership and an affiliate of the general partners.
The joint venture acquired a property in Katy, Texas from CNL Funding
2001-A, LP, an affiliate of the general partners. The Partnership and
CNL Income Fund IX, Ltd. entered into an agreement whereby each
co-venturer will share in the profits and losses of the property in
proportion to its applicable percentage interest. As of December 31,
2002, the Partnership had contributed approximately $416,700 for a 40%
interest in this joint venture.





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

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2002, 2001, and 2000


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

In August 2002, the Partnership reinvested the net sales proceeds from
the sale of the Property in Wilmette, Illinois in a Property in
Kenosha, Wisconsin as tenants-in-common with CNL Income Fund VIII, Ltd.
("CNL VIII"), a Florida limited partnership and an affiliate of the
general partners, at an approximate cost of $1,883,000. The Partnership
and CNL VIII entered into an agreement whereby each co-tenant will
share in the profits and losses of each property in proportion to its
applicable percentage interest. As of December 31, 2002, the
Partnership contributed approximately $1,694,700 for a 90% interest in
this property.

In August 2002, Mansfield Joint Venture, in which the Partnership owns
a 21% interest, sold the property in Mansfield, Texas to the tenant and
received net sales proceeds of approximately $1,011,500 resulting in a
gain of approximately $269,800. The joint venture used the proceeds
from the sale of the property and additional contributions from the
Partnership and CNL Income Fund VII, Ltd., who are the general partners
of the joint venture, of approximately $17,000 and $63,900,
respectively, to acquire a property in Arlington, Texas from CNL Net
Lease Investors, L.P., at an approximate cost of $1,089,900. CNL Income
Fund VII, Ltd. and CNL Net Lease Investors, L.P. are affiliates of the
general partners. The financial results for the property in Mansfield,
Texas are reflected as Discontinued Operations in the condensed
financial information presented below.

CNL Mansfield Joint Venture, CNL Kingston Joint Venture, Ocean Shores
Joint Venture, CNL VII & XVII Lincoln Joint Venture, Katy Joint Venture
and the Partnership and affiliates, as tenants-in-common in six
separate tenancy-in-common arrangements, each own and lease one
property to an operator of national fast-food or family-style
restaurants.

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



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

Real estate properties with operating leases, net $ 12,026,820 $ 8,220,336
Real estate held for sale -- 745,619
Cash 37,123 107,183
Receivables, less allowance for doubtful
accounts 6,468 2,119
Accrued rental income 237,749 165,314
Other assets 267 1,252
Liabilities 20,858 54,184
Partners' capital 12,287,569 9,187,639







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

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2002, 2001, and 2000


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



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

Rental revenues $ 1,482,473 $ 533,554 $ 611,339
Expenses (263,462 ) (292,591 ) (99,787 )
Provision for write-down of assets -- (980,739 ) --
------------- ---------------- ---------------

Income (loss) from continuing
operations 1,219,011 (739,776 ) 511,552
------------- ---------------- ---------------

Discontinued operations:
Income from discontinued
operations 55,954 71,660 71,814
Gain on disposal of assets 269,791 -- --
------------- ---------------- ---------------
325,745 71,660 71,814
------------- ---------------- ---------------

Net Income (Loss) $ 1,544,756 $ (668,116 ) $ 583,366
============= ================ ===============


The Partnership recognized income totaling $543,978 and $176,088 for
the years ended December 31, 2002 and 2000, and a loss totaling
$136,021 for the year ended December 31, 2001, from these joint
ventures and the properties held as tenants-in-common with affiliates.

5. Discontinued Operations:
-----------------------

In October 2001, Phoenix Restaurant Group, Inc. and its subsidiaries, a
tenant of the Partnership, filed for bankruptcy protection and rejected
the lease relating to the property in Mesquite, Nevada. In March 2002,
the Partnership sold the property to a third party and received net
sales proceeds of approximately $771,800. The Partnership had recorded
provisions for write-down of assets of $465,915 and $28,644 during the
years 2001 and 2000, respectively. No gain or loss was recognized in
2002 relating to the sale.

In May and June 2002, the Partnership sold its properties in Knoxville,
Tennessee and Wilmette, Illinois to third parties and received total
net sales proceeds of approximately $2,727,800 resulting in a total
gain of approximately $285,700.





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

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2002, 2001, and 2000


5. Discontinued Operations - Continued:
-----------------------------------

The financial results for these properties are reflected as
Discontinued Operations in the accompanying financial statements. The
operating results of discontinued operations are as follows:



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

Rental revenues $ 128,903 $ 271,352 $ 339,725
Other income -- -- 1,771
Expenses (23,425 ) (107,803 ) (46,138 )
Provision for write-down of assets -- (465,915 ) (28,644 )
Gain on disposal of assets 285,677 -- --
-------------- ------------- -------------

Income (loss) from discontinued operations $ 391,155 $(302,366 ) $ 266,714
============== ============= =============



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

From inception through December 31, 1999, distributions of net cash
flow, as defined in the limited partnership agreement of the
Partnership, were made 95 percent to the limited partners and five
percent to the general partners; provided, however, that for any
particular year, the five percent of net cash flow to be distributed to
the general partners was subordinated to receipt by the limited
partners in that year of an eight percent noncumulative, noncompounded
return on their aggregate invested capital contributions (the "Limited
Partners" 8% Return").

From inception through December 31, 1999, generally, net income
(determined without regard to any depreciation and amortization
deductions and gains and losses from the sale of properties) was
allocated between the limited partners and the general partners first,
in an amount not to exceed the net cash flow distributed to the
partners attributable to such year in the same proportions as such net
cash flow is distributed; and thereafter, 99 percent to the limited
partners and one percent to the general partners. All deductions for
depreciation and amortization were allocated 99 percent to the limited
partners and one percent to the general partners.

From inception through December 31, 1999, net sales proceeds from the
sale of a property not in liquidation of the Partnership generally were
distributed first to the limited partners in an amount sufficient to
provide them with the return of their invested capital contributions,
plus their cumulative Limited Partners' 8% Return. The general partners
then received a return of their capital contributions and, to the
extent previously subordinated and unpaid, a five percent interest in
all net cash flow distributions. Any remaining net sales proceeds were
distributed 95 percent to the limited partners and five percent to the
general partners.

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






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

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2002, 2001, and 2000


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

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

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

During each of the years ended December 31, 2002, 2001, and 2000, the
Partnership declared distributions to the limited partners of
$2,400,000. No distributions have been made to the general partners to
date.





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

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2002, 2001, and 2000


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

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



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

Net income for financial reporting purposes $ 1,726,112 $ 969,196 $ 673,138

Effect of timing differences relating to
depreciation 60,987 37,122 50,099

Effect of timing differences relating to amortization -- (848 ) (5,087 )

Direct financing leases recorded as operating
leases for tax reporting purposes 14,085 35,649 35,010


Effect of timing differences relating to equity in
earnings of unconsolidated joint ventures (88,917 ) 426,474 (747 )

Deduction of transaction costs for tax reporting
purposes -- -- (84,765 )

Accrued rental income (37,857 ) (105,700 ) (162,072 )

Rents paid in advance 23,560 (14,806 ) (11,437 )

Deferred rental income (11,912 ) (15,948 ) (12,239 )

Effect of timing differences relating to allowance
for doubtful accounts (286,567 ) 31,981 206,448

Effect of timing differences relating to gains on
real estate property sales (618,059 ) (725,184 ) (327,494 )

Provision for write-down of assets 456,000 505,491 1,107,919
--------------- -------------- --------------

Net income for federal income tax purposes $ 1,237,432 $ 1,143,427 $ 1,468,773
=============== ============== ==============






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

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2002, 2001, and 2000


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

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

The Advisor provides services pursuant to a management agreement with
the partnership. In connection therewith, the Partnership agreed to pay
certain Advisor management fees of one percent of the sum of gross
revenues from properties wholly owned by the Partnership and the
Partnership's allocable share of gross revenues from joint ventures.
Any portion of the Management fee not paid is deferred without
interest. The Partnership incurred management fees of $24,452, $21,315,
and $22,591, for the years ended December 31, 2002, 2001, and 2000,
respectively.

The Advisor is also entitled to receive a deferred, subordinated real
estate disposition fee, payable upon the sale of one or more properties
based on the lesser of one-half of a competitive real estate commission
or three percent of the sales price if the Advisor provides a
substantial amount of services in connection with the sale. However, if
the sales proceeds are reinvested in a replacement property, no such
real estate disposition fees will be incurred until such replacement
property is sold and the net sales proceeds are distributed. The
payment of the real estate disposition fee is subordinated to the
receipt by the limited partners of their aggregate 8% Preferred Return,
plus their adjusted capital contributions. No deferred, subordinated
real estate disposition fees have been incurred since inception.

During 2001, the Partnership and CNL Income Fund VII, Ltd. through a
joint venture arrangement, CNL VII & XVII Lincoln Joint Venture,
acquired a Golden Corral property from CNL BB Corp., an affiliate of
the general partners, for a total cost of $1,740,374. CNL Income Fund
VII, Ltd. is an affiliate of the general partners. CNL BB Corp. had
purchased and temporarily held title to this property in order to
facilitate the acquisition of the property by the joint venture. The
purchase price paid by the joint venture represents the costs incurred
by CNL BB Corp. to acquire and carry the property.

In December 2001, the Partnership acquired a property located in
Austin, Texas from CNL Funding 2001-A, LP, for approximately
$1,216,600. CNL Funding 2001-A, LP is an affiliate of the General
Partners. CNL Funding 2001-A, LP had purchased and temporarily held
title to this property in order to facilitate the acquisition of the
property by the Partnership. The purchase price paid by the Partnership
represented the costs incurred by CNL Funding 2001-A, LP to acquire and
carry the property.

During 2001, Phoenix Restaurant Group, Inc. ("PRG") filed for
bankruptcy and rejected one of the two leases it had with the
Partnership. The other lease was held with an affiliate of the general
partners, as tenants-in-common. The Partnership owns a 27% interest in
the tenancy in common. In May 2002, the bankruptcy court assigned this
lease, relating to the property in Corpus Christi, Texas to RAI, LLC,
an affiliate of the general partners. All other lease terms remained
the same. In connection with this lease, the tenancy in common
recognized rental revenues of approximately $127,800 during the year
ended December 31, 2002. The Partnership recognized its pro-rata share
of this amount in equity in earnings of joint ventures in the
accompanying financial statements.





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

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2002, 2001, and 2000


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

In June 2002, the Partnership acquired a property in Houston, Texas,
from CNL Funding 2001-A, LP, for approximately $1,364,200. In addition,
in June 2002, Katy Joint Venture acquired a property in Katy, Texas
from CNL Funding 2001-A, LP. CNL Funding 2001-A, LP is an affiliate of
the general partners. CNL Funding 2001-A, LP had purchased and
temporarily held title to the properties in order to facilitate the
acquisition of the properties by the Partnership and the Joint Venture.
The purchase price paid by the Partnership and the Joint Venture
represented the costs incurred by CNL Funding 2001-A, LP to acquire and
carry the properties.

In September 2002, CNL Mansfield Joint Venture acquired a property in
Arlington, Texas from CNL Net Lease Investors, L.P. ("NLI"), at an
approximate cost of $1,089,900. During 2002, and prior to the joint
venture's acquisition of this property, CNL Financial LP Holding, LP
("CFN") and CNL Net Lease Investors GP Corp. ("GP Corp") purchased the
limited partner's interest and general partner's interest,
respectively, of NLI. Prior to this transaction, an affiliate of the
Partnership's general partners owned a 0.1% interest in NLI and served
as a general partner of NLI. The original general partners of NLI
waived their rights to benefit from this transaction. The acquisition
price paid by CFN for the limited partner's interest was based on the
portfolio acquisition price. The joint venture acquired the property in
Arlington, Texas at CFN's cost and did not pay any additional
compensation to CFN for the acquisition of the property. Each CNL
entity is an affiliate of the Partnership's general partners.

During the years ended December 31, 2002, 2001, and 2000, the Advisor
and its affiliates provided accounting and administrative services. The
Partnership incurred $149,801, $189,320, and $77,769, for the years
ended December 31, 2002, 2001, and 2000, respectively, for such
services.

The amount due related parties at December 31, 2002 and 2001 totaled
$26,600 and $11,582, respectively.

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

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



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

Golden Corral Corporation $ 598,592 $ 555,303 $ 438,299
National Restaurant Enterprises, Inc. 424,696 424,696 424,696
RTM Indianapolis and RTM Southwest
Texas, Inc. 262,169 264,878 N/A
Jack in the Box Inc. (formerly
known as Foodmaker, Inc.) and
Jack in the Box Eastern Division, L.P. N/A 324,397 349,491







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

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2002, 2001, and 2000


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

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



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

Golden Corral Family Steakhouse
Restaurants $ 598,592 $ 555,303 $ 438,299
Burger King 463,478 472,109 498,959
Arby's 279,905 282,266 282,551
Jack in the Box N/A 324,397 349,491


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

Although the Partnership's properties are geographically diverse
throughout the United States and the Partnership's lessees operate a
variety of restaurant concepts, default by any of these lessees or
restaurant chains could significantly impact the results of operations
of the Partnership if the Partnership is not able to re-lease the
properties in a timely manner.







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

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2002, 2001, and 2000


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

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



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

Continuing Operations (1):
Revenues $ 442,010 $445,408 $484,197 $441,572 $1,813,187
Equity in earnings of joint
ventures 76,861 163,822 172,098 131,197 543,978
Income from continuing
operations (2) 373,876 466,460 524,045 (29,424 ) 1,334,957

Discontinued Operations (1)
Revenues 67,838 61,065 -- -- 128,903
Income from discontinued
operations 52,727 338,428 -- -- 391,155

Net income (loss) 426,603 804,888 524,045 (29,424 ) 1,726,112

Net income per limited partner unit:
Continuing Operations $ 0.12 $ 0.16 $ 0.17 $ -- $ 0.45
Discontinued Operations 0.02 0.11 -- -- 0.13
----------- ---------- ---------- ---------- -------------
Total $ 0.14 $ 0.27 $ 0.17 $ -- $ 0.58
=========== ========== ========== ========== =============

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

Continuing Operations (1):
Revenues $ 473,385 $441,692 $427,398 $451,318 $1,793,793
Equity in earnings (loss) of
joint ventures 23,148 22,512 (247,938 ) 66,257 (136,021 )
Income from continuing 242,970 219,017 435,944 373,631 1,271,562
operations

Discontinued Operations (1):
Revenues 68,539 76,155 99,826 26,832 271,352
Income (loss) from discontinued
operations 57,562 (20,267 ) (121,198 ) (218,463 ) (302,366 )

Net income 300,532 198,750 314,746 155,168 969,196

Net income (loss) per limited partner unit:
Continuing Operations: $ 0.08 $ 0.08 $ 0.14 $ 0.12 $ 0.42
Discontinued Operations 0.02 (0.01 ) (0.04 ) (0.07 ) (0.10 )
----------- ---------- ---------- ---------- -------------
$ 0.10 $ 0.07 $ 0.10 $ 0.05 $ 0.32
=========== ========== ========== ========== =============


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






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

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2002, 2001, and 2000


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

operations relating to properties that were identified for
sale as of December 31, 2001 but sold subsequently are
reported as continuing operations.

(2) In December 2002, the Partnership recorded provisions for
write-down of assets in the amount of $456,000 relating to the
Properties in Harvey and Chicago Ridge, Illinois, as a result
of AmeriKing Corporation, the parent company to National
Restaurant Enterprises, Inc., the tenant of these Properties,
filing for bankruptcy protection. The provision represented
the difference between the carrying value of the Properties
and their estimated fair value.





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

None.


PART III


Item 10. Directors and Executive Officers of the Registrant

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

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

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

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

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

Section 16(a) Beneficial Ownership Reporting Compliance

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

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






Item 11. Executive Compensation

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


Item 12. Security Ownership of Certain Beneficial Owners and Management

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

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



Title of Class Name of Partner Percent of Class

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


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

The Partnership does not have any equity compensation plans.







Item 13. Certain Relationships and Related Transactions

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



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

Reimbursement to affiliates for Operating expenses are reimbursed at Accounting and
operating expenses the lower of cost or 90% of the admin-istrative services:
prevailing rate at which comparable $149,801
services could have been obtained in
the same geographic area.
Affiliates of the General Partners
from time to time incur certain
operating expenses on behalf of the
Partnership for which the
Partnership reimburses the
affiliates without interest.

Annual management fee to One percent of the sum of gross $24,452
affiliates revenues (excluding noncash and
lease accounting adjustments) from
Properties wholly owned by the
Partnership plus the Partnership's
allocable share of gross revenues of
joint ventures in which the Partnership
is a co-venturer. The management fee,
which will not exceed competitive fees
for comparable services in the same
geographic area, may or may not be taken,
in whole or in part as to any year, in
the sole discretion of the affiliates.
All of any portion of the management fee
not taken as to any fiscal year shall be
deferred without interest and may be
taken in such other fiscal year as the
affiliates shall determine.











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

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

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

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









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

General Partners' share of Distributions of net sales proceeds $-0-
Partnership net sales pro-ceeds from a sale or sales of
from a sale or sales in substantially all of the
liquidation of the Partnership Partnership's assets will be
distributed in the following order or
priority: (i) first, to pay all debts and
liabilities of the Partnership and to
establish reserves; (ii) second, to
Partners with positive capital account
balances, determined after the allocation
of net income, net loss, gain and loss,
in proportion to such balances, up to
amounts sufficient to reduce such
balances to zero; and (iii) thereafter,
95% to the Limited Partners and 5% to the
General Partners.



During 2001, the Partnership and CNL Income Fund VII, Ltd. through a joint
venture arrangement, CNL VII & XVII Lincoln Joint Venture, acquired a Golden
Corral Property from CNL BB Corp., an affiliate of the General Partners, for a
total cost of $1,740,374. CNL Income Fund VII, Ltd. is a Florida limited
partnership and an affiliate of the General Partners. CNL BB Corp. had purchased
and temporarily held title to this Property in order to facilitate the
acquisition of the Property by the joint venture. The purchase price paid by the
joint venture represents the costs incurred by CNL BB Corp. to acquire and carry
the Property.

In December 2001, the Partnership acquired a Property located in Austin, Texas
from CNL Funding 2001-A, LP, for approximately $1,216,600. CNL Funding 2001-A,
LP is a Delaware limited partnership and an affiliate of the General Partners.
CNL Funding 2001-A, LP had purchased and temporarily held title to this Property
in order to facilitate the acquisition of the Property by the Partnership. The
purchase price paid by the Partnership represented the costs incurred by CNL
Funding 2001-A, LP to acquire and carry the Property.

During 2001, PRG filed for bankruptcy and rejected one of the two leases it had
with the Partnership. The other lease was held with an affiliate of the General
Partners, as tenants-in-common. The Partnership owns a 27% interest in the
tenancy in common. In May 2002, the bankruptcy court assigned this lease,
relating to the property in Corpus Christi, Texas to RAI, LLC, an affiliate of
the General Partners. All other lease terms remained the same. In connection
with this lease, the tenancy in common recognized rental revenues of
approximately $127,800 during the year ended December 31, 2002. The Partnership
recognized its pro-rata share of this amount in equity in earnings of joint
ventures in the accompanying financial statements.

In June 2002, the Partnership acquired a Property in Houston, Texas, from CNL
Funding 2001-A, LP, for approximately $1,364,200. In addition, in June 2002,
Katy Joint Venture acquired a Property in Katy, Texas from CNL Funding 2001-A,
LP. CNL Funding 2001-A, LP is an affiliate of the General Partners. CNL Funding
2001-A, LP had purchased and temporarily held title to the Properties in order
to facilitate the acquisition of the Properties by the Partnership and the joint
venture. The purchase price paid by the Partnership and the joint venture
represented the costs incurred by CNL Funding 2001-A, LP to acquire and carry
the Properties.






In September 2002, CNL Mansfield Joint Venture acquired a Property in Arlington,
Texas from CNL Net Lease Investors, L.P. ("NLI"), at an approximate cost of
$1,089,900. During 2002, and prior to the joint venture's acquisition of this
Property, CNL Financial LP Holding, LP ("CFN") and CNL Net Lease Investors GP
Corp. ("GP Corp") purchased the limited partner's interest and general partner's
interest, respectively, of NLI. Prior to this transaction, an affiliate of the
Partnership's General Partners owned a 0.1% interest in NLI and served as a
general partner of NLI. The original general partners of NLI waived their rights
to benefit from this transaction. The acquisition price paid by CFN for the
limited partner's interest was based on the portfolio acquisition price. The
joint venture acquired the Property in Arlington, Texas at CFN's cost and did
not pay any additional compensation to CFN for the acquisition of the Property.
Each CNL entity is an affiliate of the Partnership's General Partners.


Item 14. Controls and Procedures

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

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

PART IV


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

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

1. Financial Statements



Report of Independent Certified Public Accountants

Balance Sheets at December 31, 2002 and 2001

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

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

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

Notes to Financial Statements

2. Financial Statement Schedules

Schedule II - Valuation and Qualifying Accounts for the years
ended December 31, 2002, 2001, and 2000

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

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

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


3. Exhibits

**3.1 Affidavit and Certificate of Limited Partnership of
CNL Income Fund XVII, Ltd. (Filed as Exhibit 3.2 to
the Registrant's Registration Statement on Form S-11,
No. 33-90998, incorporated herein by reference.)

**3.2 Amended and Restated Agreement of Limited Partnership
of CNL Income Fund XVII, Ltd. (Included as Exhibit
4.2 to Form 10-K filed with the Securities and
Exchange Commission on March 21, 1996, and
incorporated herein by reference.)

**4.1 Affidavit and Certificate of Limited Partnership of
CNL Income Fund XVII, Ltd. (Included as Exhibit 3.2
to Registration Statement No. 33-90998-01 on Form
S-11 and incorporated herein by reference.)

**4.2 Amended and Restated Agreement of Limited Partnership
of CNL Income Fund XVII, Ltd. (Included as Exhibit
4.2 to Form 10-K filed with the Securities and
Exchange Commission on March 21, 1996, and
incorporated herein by reference.)

**4.3 Form of Agreement between CNL Income Fund XVII, Ltd.
and MMS Escrow and Transfer Agency, Inc. and between
CNL Income Fund XVIII, Ltd. and MMS Escrow and
Transfer Agency, Inc. relating to the Distribution
Reinvestment Plans (Filed as Exhibit 4.4 to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)

**8.3 Opinion of Baker & Hostetler regarding certain
material issues relating to the Distribution
Reinvestment Plan of CNL Income Fund XVII, Ltd.
(Filed as Exhibit 8.3 to Amendment No. Three to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)

**10.1 Management Agreement between CNL Income Fund XVII,
Ltd. and CNL Fund Advisors, Inc. (Included as Exhibit
10.1 to Form 10-K filed with the Securities and
Exchange Commission on March 20, 1997, and
incorporated herein by reference.)

**10.2 Form of Joint Venture Agreement for Joint Ventures
with Unaffiliated Entities (Filed as Exhibit 10.2 to
the Registrant's Registration Statement on Form S-11,
No. 33-90998, incorporated herein by reference.)

**10.3 Assignment of Management Agreement from CNL Fund
Advisors, Inc. to CNL APF Partners, LP. (Including as
Exhibit 10.2 to Form 10-Q filed with the Securities
and Exchange Commission on August 13, 2001, and
incorporated herein by reference.)

**10.4 Form of Joint Venture Agreement for Joint Ventures
with Affiliated Programs (Filed as Exhibit 10.3 to
the Registrant's Registration Statement on Form S-11,
No. 33-90998, incorporated herein by reference.)

**10.5 Form of Development Agreement (Filed as Exhibit 10.5
to the Registrant's Registration Statement on Form
S-11, No. 33-90998, incorporated herein by
reference.)

**10.6 Form of Indemnification and Put Agreement (Filed as
Exhibit 10.6 to the Registrant's Registration
Statement on Form S-11, No. 33-90998, incorporated
herein by reference.)

**10.7 Form of Unconditional Guarantee of Payment and
Performance (Filed as Exhibit 10.7 to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)

**10.8 Form of Lease Agreement for Existing Restaurant
(Filed as Exhibit 10.8 to the Registrant's
Registration Statement on Form S-11, No. 33-90998,
incorporated herein by reference.)

**10.9 Form of Lease Agreement for Restaurant to be
Constructed (Filed as Exhibit 10.9 to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)

**10.10 Form of Premises Lease for Golden Corral Restaurant
(Filed as Exhibit 10.10 to the Registrant's
Registration Statement on Form S-11, No. 33-90998,
incorporated herein by reference.)

**10.11 Form of Agreement between CNL Income Fund XVII, Ltd.
and MMS Escrow and Transfer Agency, Inc. and between
CNL Income Fund XVIII, Ltd. and MMS Escrow and
Transfer Agency, Inc. relating to the Distribution
Reinvestment Plans (Filed as Exhibit 4.4 to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)

**10.12 Form of Cotenancy Agreement with Unaffiliated Entity
(Filed as Exhibit 10.12 to Amendment No. One to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)

**10.13 Form of Cotenancy Agreement with Affiliated Entity
(Filed as Exhibit 10.13 to Amendment No. One to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)

**10.14 Form of Registered Investor Advisor Agreement (Filed
as Exhibit 10.14 to Amendment No. One to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)

**10.15 Assignment of Management Agreement from CNL APF
Partners, LP to CNL Restaurants XVIII, Inc. (Included
as Exhibit 10.15 to Form 10-Q filed with the
Securities and Exchange Commission on August 14,
2002, and incorporated herein be reference.)

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

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

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

(c) Not applicable.

(d) Other Financial Information.

The Partnership is required to file audited financial
information of one of its tenants (Golden Corral Corporation)
as a result of this tenant leasing more than 20 percent of the
Partnership's total assets for the year ended December 31,
2002. Golden Corral Corporation is a privately-held company,
and its financial information is not available to the
Partnership to include in this filing. The Partnership will
file this financial information under cover of a Form 10-K/A
as soon as it is available.

**previously filed









SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on the 25th day of
March, 2003.

CNL INCOME FUND XVII, LTD.

By:CNL REALTY CORPORATION
General Partner

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


By:ROBERT A. BOURNE
General Partner

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


By:JAMES M. SENEFF, JR.
General Partner

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









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



Signature Title Date



/s/ Robert A. Bourne President, Treasurer and Director March 25, 2003
- ------------------------------------ (Principal Financial and Accounting
Robert A. Bourne Officer)


/s/ James M. Seneff, Jr. Chief Executive Officer and Director March 25, 2003
- ------------------------------------ (Principal Executive Officer)
James M. Seneff, Jr.









CERTIFICATION OF CHIEF EXECUTIVE OFFICER
OF CORPORATE GENERAL PARTNER

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


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

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

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

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

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

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

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

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

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

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

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

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

Date: March 25, 2003


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





CERTIFICATION OF CHIEF FINANCIAL OFFICER
OF CORPORATE GENERAL PARTNER

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

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

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

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

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

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

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

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

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

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

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

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

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


Date: March 25, 2003


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





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

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

Years Ended December 31, 2002, 2001, and 2000




Additions Deductions
---------------------------------- ----------------------------
Collected
or Deter-
Balance at Charged to Charged to Deemed mined to Balance
Beginning Costs and Other Uncollec- be Col- at End
Year Description of Year Expenses Accounts tible lectible of Year
- ---------- ----------------- -------------- --------------- ---------------- ------------ ------------ ------------

2000 Allowance for
doubtful
accounts (a) $ 48,138 $ 35,807 $ 249,776 (b) $ 3,966 (c) $ 27,434 $ 302,321
============== =============== ================ ============ ============ ============

2001 Allowance for
doubtful
accounts (a) $ 302,321 $ 24,589 $ 209,629 (b) $ 249,972 (c) $ -- $ 286,567
============== =============== ================ ============ ============ ============

2002 Allowance for
doubtful
accounts (a) $ 286,567 $ -- $ -- $(286,567 )(c) $ -- $ --
============== =============== ================ ============ ============ ============



(a) Deducted from receivables and accrued rental income.

(b) Reduction of rental, earned and other income.

(c) Amounts written off as uncollectible.





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

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2002



Costs Capitalized
Subsequent to
Initial Cost Acquisition
------------------------ ------------------
Encum- Buildings andImprove- Carrying
brances Land Improvements ments Costs
----------- ---------------------- -------
Properties the Partnership
has Invested in Under
Under Operating Leases:

Arby's Restaurants:
Muncie, Indiana (m) - $242,759 $564,223 - -
Schertz, Texas - 348,245 470,577 - -
Plainfield, Indiana - 296,025 557,809 - -

Burger King Restaurants:
Harvey, Illinois (n) - 489,341 734,010 -
Chicago Ridge, Illinois -o) 771,965 - 699,556 -
Lyons, Illinois - 887,767 - 597,381 -

Denny's Restaurants:
Pensacola, Florida - 305,509 670,990 - -

Fazoli's Restaurant:
Warner Robins, Georgia - 300,482 - 421,898 -

Golden Corral Family
Steakhouse Restaurants:
Orange Park, Florida- 711,838 1,162,406 - -
Aiken, South Carolin- (g) 508,790 - 862,571 -
Weatherford, Texas (-) 345,926 - 691,222 -

Jack in the Box Restaurants:
Dinuba, California - 324,970 - 509,982 -
LaPorte, Texas - 355,929 - 560,485 -

Taco Cabana Restaurants:
Austin, Texas - 523,988 692,611 - -
Houston, Texas (p) - 700,105 664,089 - -

Wendy's Old Fashioned
Hamburgers Restaurants:
Livingston, Tennesse- 261,701 - - -
----------- ----------- --------- -------

$7,375,340 $5,516,715 $4,343,095 -
=========== =========== ========= =======



Property in Which the Partner-
ship has a 19.56% Interest
as Tenants-in-Common and
has Invested in Under an
Operating Lease:

Boston Market Restaurant:
Fayetteville, Nort- Carolina $377,800 $587,700 - -
=========== =========== ========= =======

Property in Which the Partner-
ship has a 27.42% Interest
as Tenants-in-Common and
has Invested in Under an
Operating Lease:

Black-eyed Pea Restaurant:
Corpus Christi, Te-as (f) (h) $715,052 $726,004 - -
=========== =========== ========= =======

Property in Which the Partner-
ship has a 36.91% Interest
as Tenants-in-Common and
has Invested in Under an
Operating Lease:

Burger King Restaurant:
Akron, Ohio (f) - $355,594 $517,030 - -
=========== =========== ========= =======


Property of Joint Venture in
Which the Partnership has
a 21% Interest and
has Invested in Under an
Operating Lease:

Jack in the Box Restaurant:
Arlington, Texas (-) $409,795 $680,085 - -
=========== =========== ========= =======

Property of Joint Venture in
Which the Partnership has
a 60.06% Interest and
has Invested in Under an
Operating Lease:

Taco Bell Restaurant:
Kingston, Tennesse- $189,452 $328,444 - -
=========== =========== ========= =======

Property of Joint Venture in
Which the Partnership has
a 30.94% Interest and
has Invested in Under an
Operating Lease:

Burger KinghRestaurantaurant:
Ocean Shores, WA (-) $351,015 $789,560 - -
=========== =========== ========= =======

Property in which the Partnership
has a 24% Interest as
Tenants-in-Common and
has invested in Under an
Operating Lease:

Arby's Restaurant:
Zephyrhills, FL - $260,146 $441,434 - -
=========== =========== ========= =======

Property of Joint Venture in
Which the Partnership has
a 86% Interest and
has Invested in Under an
Operating Lease:

Golden Corral Restaurant:
Lincoln, Nebraska - $485,390 $1,254,984 $9,431 -
=========== =========== ========= =======

Property in which the Partnership
has a 25% Interest as
Tenants-in-Common and
has invested in Under an
Operating Lease:

Bennigan's Restaurant:
Waldorf, Maryland - $968,984 $1,311,515 - -
=========== =========== ========= =======

Property of Joint Venture in
Which the Partnership has
a 40% Interest and
has Invested in Under an
Operating Lease:

Taco Cabana Restaurants:
Katy,iTexas,(k)braska - $623,066 $418,676 - -
=========== =========== ========= =======

Property in which the Partnership
has a 90% Interest as
Tenants-in-Common and
has invested in Under an
Operating Lease:

Texas Roadhouse Restaurant:
Kenosha,dWisconsinland - $645,886 $1,237,163 - -
=========== =========== ========= =======

Properties the Partnership has
Invested in Under Direct
Financing Leases:

Wendy's Old Fashioned
Hamburgers Restaurant:
Livingston, Tennesse- - - $455,575 -
=========== =========== ========= =======










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





$242,759 $564,223 $806,982 $14,513 1995 03/96 (m)
348,245 470,577 818,822 102,474 1996 06/96 (c)
296,025 557,809 853,834 115,026 1996 10/96 (c)


403,341 634,010 1,037,351 166,537 1996 03/96 (c)
613,965 587,556 1,201,521 154,392 1996 03/96 (c)
887,767 597,381 1,485,148 112,489 1997 11/96 (c)


305,509 670,990 976,499 143,221 1996 08/96 (c)


300,482 421,898 722,380 86,614 1996 08/96 (c)



711,838 1,162,406 1,874,244 264,408 1996 03/96 (c)
508,790 862,571 1,371,361 188,488 1996 04/96 (c)
345,926 691,222 1,037,148 145,859 1996 03/96 (c)


324,970 509,982 834,952 107,923 1996 05/96 (c)
355,929 560,485 916,414 117,230 1996 07/96 (c)


523,988 692,611 1,216,599 25,011 1990 12/01 (c)
700,105 664,089 1,364,194 12,912 1990 06/02 (c)



261,701 (d) 261,701 (e) 1996 06/96 (e)
- ------------ ----------- ---------- ----------

$7,131,340 $9,647,810 $16,779,150 $1,757,097
============ =========== ========== ==========










$377,800 $587,700 $965,500 $122,308 1996 10/96 (c)
============ =========== ========== ==========








$584,525 $614,141 $1,198,666 $138,650 1992 01/97 (c)
============ =========== ========== ==========








$355,594 $517,030 $872,624 $102,158 1970 01/97 (c)
============ =========== ========== ==========









$409,795 $680,085 $1,089,880 $10,075 1995 9/02 (c)
============ =========== ========== ==========








$189,452 $328,444 $517,896 $55,715 1997 09/97 (c)
============ =========== ========== ==========








$120,916 $281,310 $402,226 $24,923 1998 01/99 (c)
============ =========== ========== ==========








$260,146 $441,434 $701,580 $58,161 1990 01/99 (c)
============ =========== ========== ==========








$485,390 $1,264,415 $1,749,805 $73,758 2000 04/01 (c)
============ =========== ========== ==========








$968,984 $1,311,515 $2,280,499 $65,575 2001 07/01 (c)
============ =========== ========== ==========








$623,066 $418,676 $1,041,742 $8,141 1994 06/02 (c)
============ =========== ========== ==========








$645,886 $1,237,163 $1,883,049 $17,183 2002 08/02 (c)
============ =========== ========== ==========







- (d) (d) (e) 1996 06/96 (e)
============








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

NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2002


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



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

Properties the Partnership has Invested
in Under Operating Leases:

Balance, December 31, 1999 $ 17,658,534 $ 1,194,416
Acquisitions 1,695,927 --
Dispositions (1,470,189 ) (69,579 )
Provision for write-down of assets (565,070 ) --
Depreciation expense -- 347,336
---------------- -----------------

Balance, December 31, 2000 17,319,202 1,472,173
Acquisitions 1,216,598 --
Dispositions (3,189,492 ) (321,421 )
Provision for write-down of assets (39,575 ) --
Depreciation expense -- 291,966
---------------- -----------------

Balance, December 31, 2001 15,306,733 1,442,718
Acquisitions (p) 1,364,194 --
Reclassification from direct financing lease (m) 564,223 --
Provision for write-down of assets (n) (o) (456,000 ) --
Depreciation expense -- 314,379
---------------- -----------------

Balance, December 31, 2002 $ 16,779,150 $ 1,757,097
================ =================

Property in Which the Partnership has a 19.56% Interest as
Tenants-in-Common and has Invested in Under an Operating Lease:

Balance, December 31, 1999 $ 965,500 $ 63,538
Depreciation expense -- 19,590
---------------- -----------------

Balance, December 31, 2000 965,500 83,128
Depreciation expense -- 19,590
---------------- -----------------

Balance, December 31, 2001 965,500 102,718
Depreciation expense -- 19,590
---------------- -----------------

Balance, December 31, 2002 $ 965,500 $ 122,308
================ =================





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

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

December 31, 2002



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

Property in Which the Partnership has a 27.42% Interest as
Tenants-in-Common and has Invested in Under an Operating Lease:

Balance, December 31, 1999 $ 1,441,056 $ 70,848
Depreciation expense -- 24,201
---------------- ----------------

Balance, December 31, 2000 1,441,056 95,049
Provision for write-down of assets (h) (242,390 ) --
Depreciation expense -- 19,770
---------------- ----------------

Balance, December 31, 2001 1,198,666 114,819
Depreciation expense -- 23,831
---------------- ----------------

Balance, December 31, 2002 $ 1,198,666 $ 138,650
================ ================

Property in Which the Partnership has a 36.91% Interest as
Tenants-in-Common and has Invested in Under an Operating Lease:

Balance, December 31, 1999 $ 872,624 $ 50,456
Depreciation expense -- 17,234
---------------- ----------------

Balance, December 31, 2000 872,624 67,690
Depreciation expense -- 17,234
---------------- ----------------

Balance, December 31, 2001 872,624 84,924
Depreciation expense -- 17,234
---------------- ----------------

Balance, December 31, 2002 $ 872,624 $ 102,158
================ ================






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

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

December 31, 2002




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

Property of Joint Venture in Which the Partnership has a 21%
Interest and has Invested in Under an Operating Lease:

Balance, December 31, 2001 (j) $ -- $ --
Acquisition (l) 1,089,880 --
Depreciation expense -- 10,075
---------------- ----------------

Balance, December 31, 2002 $ 1,089,880 $ 10,075
================ ================

Property of Joint Venture in which the Partnership has a 60.06%
Interest and has Invested in under an Operating Lease:

Balance, December 31, 1999 $ 517,896 $ 22,868
Depreciation expense -- 10,949
---------------- ----------------

Balance, December 31, 2000 517,896 33,817
Depreciation expense -- 10,949
---------------- ----------------

Balance, December 31, 2001 517,896 44,766
Depreciation expense -- 10,949
---------------- ----------------

Balance, December 31, 2002 $ 517,896 $ 55,715
================ ================






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

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

December 31, 2002




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

Property of Joint Venture in which the Partnership has a 30.94%
Interest and has Invested in Under an Operating Lease:

Balance, December 31, 1999 $ 351,015 $ --
Depreciation expense (e) -- --
---------------- ----------------

Balance, December 31, 2000 351,015 --
Reclassification from direct financing lease 789,560 --
Provision for write-down of assets (738,349 ) --
Depreciation expense -- 15,122
---------------- ----------------

Balance, December 31, 2001 402,226 15,122
Depreciation expense -- 9,801
---------------- ----------------

Balance, December 31, 2002 $ 402,226 $ 24,923
================ ================

Property in which the Partnership has a 24% Interest as
Tenants-in-Common and has Invested in Under an Operating Lease:

Balance, December 31, 1999 $ 701,580 $ 13,532
Depreciation expense -- 15,201
---------------- ----------------

Balance, December 31, 2000 701,580 28,733
Depreciation expense -- 14,714
---------------- ----------------

Balance, December 31, 2001 701,580 43,447
Depreciation expense -- 14,714
---------------- ----------------

Balance, December 31, 2002 $ 701,580 $ 58,161
================ ================






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

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

December 31, 2002




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

Property of Joint Venture in which the Partnership has a 86%
Interest and has Invested in Under an Operating Lease:

Balance, December 31, 2000 $ -- $ --
Acquisition 1,740,374 --
Depreciation expense -- 31,375
---------------- ----------------

Balance, December 31, 2001 1,740,374 31,375
Capitalization of additional construction costs 9,431 --
Depreciation expense -- 42,383
---------------- ----------------

Balance, December 31, 2002 $ 1,749,805 $ 73,758
================ ================

Property in which the Partnership has a 25% Interest as
Tenants-in-Common and has Invested in Under an Operating Lease:

Balance, December 31, 2000 $ -- $ --
Acquisitions 2,280,499 --
Depreciation expense -- 21,858
---------------- ----------------

Balance, December 31, 2001 $ 2,280,499 $ 21,858
Depreciation expense -- 43,717
---------------- ----------------

Balance, December 31, 2002 $ 2,280,499 $ 65,575
================ ================

Property of Joint Venture in Which the Partnership has a
40% Interest and has Invested in Under an
Operating Lease:

Balance, December 31, 2001 $ -- $ --
Acquisitions (k) 1,041,742 --
Depreciation expense -- 8,141
---------------- ----------------

Balance, December 31, 2002 $ 1,041,742 $ 8,141
================ ================






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

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

December 31, 2002



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

Property in which the Partnership has a 90% Interest as
Tenants-in-Common and has Invested in Under an Operating Lease:

Balance, December 31, 2001 $ -- $ --
Acquisitions 1,883,049 --
Depreciation expense -- 17,183
---------------- ----------------

Balance, December 31, 2002 $ 1,883,049 $ 17,183
============ ===========


(b) As of December 31, 2002, the aggregate cost of the Properties owned by
the Partnership and the joint venture for federal income tax purposes
was $17,341,796 and $13,396,933, respectively. All of the leases are
treated as operating leases for federal income tax purposes.

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

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

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

(f) During the years ended December 31, 1997 and 1996, the Partnership
purchased land and buildings from affiliates of the Partnership for
aggregate costs of approximately $718,932 and $1,667,100, respectively.

(g) During the year ended December 31, 1998, the Partnership received
reimbursements from the developer of the property upon final
reconciliation of total construction costs. In connection therewith,
the land and building value was adjusted accordingly.

(h) The undepreciated cost of the Property in Corpus Christi, Texas, in
which the Partnership owns an interest, as tenants-in-common with an
affiliate of the General Partners, was written down to its estimated
fair value due to an impairment in value. The Partnership recognized
the impairment by recording a provision for write-down of assets in the
amount of $242,390 at December 31, 2001. The provision represented the
difference between the Property's carrying value and its estimated fair
value at December 31, 2001. The cost of the Property presented on this
schedule is the net amount at which the Property was carried at
December 31, 2001, including the provision for write-down of assets.

(i) The undepreciated cost of the Property in Ocean Shores, Washington,
owned by Ocean Shores Joint Venture, was written down to net realizable
value due to an impairment in value. The Partnership recognized the
impairment by recording a provision for write-down of assets in the
amount of $738,349 at December 31, 2001. The impairment represented the
difference between the Property's carrying value and the estimated net
realizable value of the Property at December 31, 2001. The cost of the
Property presented on this schedule is the net amount at which the
Property was carried at December 31, 2001, including the provision for
write-down of assets.






(j) In August 2002, Mansfield Joint Venture sold the property in Mansfield,
Texas. As a result, the joint venture reclassified the assets relating
to this property from real estate with operating leases to real estate
held for sale.

(k) During 2002, Katy Joint Venture, in which the Partnership owns a 40%
interest, purchased a real estate property from CNL 2001-A, LP, an
affiliate of the General Partners, for an aggregate cost of
approximately $1,041,700.

(l) During 2002, Mansfield Joint Venture, in which the Partnership owns a
21% interest, purchased a real estate property from CNL Net Lease
Investors, LP, an affiliate of the General Partners, for an aggregate
cost of approximately $1,089,900.

(m) Effective April 2002, the lease for this property was amended,
resulting in the reclassification of the building portion of the lease
to an operating lease. The building was recorded at net book value, and
will be depreciated over its remaining estimated life of approximately
26 years.

(n) The undepreciated cost of the Property in Harvey, Illinois, was written
down to it estimated fair value due to an impairment in value. The
Partnership recognized the impairment by recording a provision for
write-down of assets in the amount of $186,000 at December 31, 2002.
The provision represented the difference between the Property's
carrying value and the estimated fair value at December 31, 2002. The
cost of the Property presented on this schedule is the net amount at
which the Property was carried at December 31, 2002, including the
provision for write-down of assets.

(o) The undepreciated cost of the Property in Chicago, Illinois, was
written down to its estimated fair value due to an impairment in value.
The Partnership recognized the impairment by recording a provision for
write-down of assets in the amount of $270,000 at December 31, 2002.
The provision represented the difference between the Property's
carrying value and the estimated fair value at December 31, 2002. The
cost of the Property presented on this schedule is the net amount at
which the Property was carried at December 31, 2002, including the
provision for write-down of assets.

(p) During 2002, the Partnership purchased a real estate property from CNL
2001-A, LP, an affiliate of the General Partners, for an aggregate cost
of approximately $ 1,364,200.








EXHIBIT INDEX


Exhibit Number

(a) Exhibits

**3.1 Affidavit and Certificate of Limited Partnership of
CNL Income Fund XVII, Ltd. (Filed as Exhibit 3.1 to
the Registrant's Registration Statement on Form S-11,
No. 33-90998, incorporated herein by reference.)

**3.2 Amended and Restated Agreement of Limited Partnership
of CNL Income Fund XVII, Ltd. (Included as Exhibit
4.2 to Form 10-K filed with the Securities and
Exchange Commission on March 21, 1996, and
incorporated herein by reference.)

**4.1 Affidavit and Certificate of Limited Partnership of
CNL Income Fund XVII, Ltd. (Filed as Exhibit 3.1 to
Registration Statement No. 33-90998 on Form S-11 and
incorporated herein by reference.)

**4.2 Amended and Restated Agreement of Limited Partnership
of CNL Income Fund XVII, Ltd. (Included as Exhibit
4.2 to Form 10-K filed with the Securities and
Exchange Commission on March 21, 1996, and
incorporated herein by reference.)

**4.3 Form of Agreement between CNL Income Fund XVII, Ltd.
and MMS Escrow and Transfer Agency, Inc. and between
CNL Income Fund XVIII, Ltd. and MMS Escrow and
Transfer Agency, Inc. relating to the Distribution
Reinvestment Plans (Filed as Exhibit 4.4 to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)

**8.3 Opinion of Baker & Hostetler regarding certain
material issues relating to the Distribution
Reinvestment Plan of CNL Income Fund XVII, Ltd.
(Filed as Exhibit 8.3 to Amendment No. Three to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)

**10.1 Management Agreement between CNL Income Fund XVII,
Ltd. and CNL Fund Advisors, Inc. (Included as Exhibit
10.1 to Form 10-K filed with the Securities and
Exchange Commission on March 21, 1996, and
incorporated herein by reference.)

**10.2 Assignment of Management Agreement from CNL Fund
Advisors, Inc. to CNL APF Partners, LP. (Included as
Exhibit 10.2 to Form 10-Q filed with the Securities
and Exchange Commission on August 13, 2001, and
incorporated herein by reference.)

**10.3 Form of Joint Venture Agreement for Joint Ventures
with Unaffiliated Entities (Filed as Exhibit 10.2 to
the Registrant's Registration Statement on Form S-11,
No. 33-90998, incorporated herein by reference.)

**10.4 Form of Joint Venture Agreement for Joint Ventures
with Affiliated Programs (Filed as Exhibit 10.3 to
the Registrant's Registration Statement on Form S-11,
No. 33-90998, incorporated herein by reference.)

**10.5 Form of Development Agreement (Filed as Exhibit 10.5
to the Registrant's Registration Statement on Form
S-11, No. 33-90998, incorporated herein by
reference.)

**10.6 Form of Indemnification and Put Agreement (Filed as
Exhibit 10.6 to the Registrant's Registration
Statement on Form S-11, No. 33-90998, incorporated
herein by reference.)

**10.7 Form of Unconditional Guarantee of Payment and
Performance (Filed as Exhibit 10.7 to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)

**10.8 Form of Lease Agreement for Existing Restaurant
(Filed as Exhibit 10.8 to the Registrant's
Registration Statement on Form S-11, No. 33-90998,
incorporated herein by reference.)

**10.9 Form of Lease Agreement for Restaurant to be
Constructed (Filed as Exhibit 10.9 to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)

**10.10 Form of Premises Lease for Golden Corral Restaurant
(Filed as Exhibit 10.10 to the Registrant's
Registration Statement on Form S-11, No. 33-90998,
incorporated herein by reference.)

**10.11 Form of Agreement between CNL Income Fund XVII, Ltd.
and MMS Escrow and Transfer Agency, Inc. and between
CNL Income Fund XVIII, Ltd. and MMS Escrow and
Transfer Agency, Inc. relating to the Distribution
Reinvestment Plans (Filed as Exhibit 4.4 to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)

**10.12 Form of Cotenancy Agreement with Unaffiliated Entity
(Filed as Exhibit 10.12 to Amendment No. One to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)

**10.13 Form of Cotenancy Agreement with Affiliated Entity
(Filed as Exhibit 10.13 to Amendment No. One to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)

**10.14 Form of Registered Investor Advisor Agreement (Filed
as Exhibit 10.14 to Amendment No. One to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)

**10.15 Assignment of Management Agreement from CNL APF
Partners, LP to CNL Restaurants XVIII, Inc. (Included
as Exhibit 10.15 to Form 10-Q filed with the
Securities and Exchange Commission on August 14,
2002, and incorporated herein be reference.)

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

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

**previously filed






EXHIBIT 99.1






EXHIBIT 99.2