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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-Q



|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2004 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 333-112169



APPLE REIT SIX, INC.

(Exact name of
registrant as specified in its charter)



|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|VIRGINIA                                                       |  | 20-0620523                       
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification No.)



|                                         |  |           
|---------------------------------------- |  | ----------
|10 SOUTH THIRD STREET RICHMOND, VIRGINIA |  | 23219     
|(Address of principal executive offices) |  | (Zip Code)



(804) 344-8121

(Registrants telephone number, including area code)



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 for 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 whether the registrant is an accelerated filer (as defined in Rule 12 b-2 of the Exchange Act). Yes ̈No x



At August 4, 2004, there were 14,888,509 outstanding shares of common stock, no par value, of the registrant.



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APPLE REIT SIX, INC.



FORM 10-Q



INDEX



|               |  |                                                                                                                                                             |  |            
|-------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------
|               |  |                                                                                                                                                             |  | Page Number
|PART I.        |  | FINANCIAL INFORMATION                                                                                                                                       |  |            
|               |  |                                                                                                                                                            
|Item 1.        |  | Financial Statements (Unaudited)                                                                                                                            |  |            
|               |  |                                                                                                                                                            
|               |  | Consolidated Balance Sheets - June 30, 2004 and January 20, 2004 (initial capitalization)                                                                   |  | 3          
|               |  |                                                                                                                                                            
|               |  | Consolidated Statement of Operations - For the period January 20, 2004 (initial capitalization) Through June 30, 2004 and Three Months Ending June 30, 2004 |  | 4          
|               |  |                                                                                                                                                            
|               |  | Consolidated Statement of Cash Flows - For the period January 20, 2004 (initial capitalization) Through June 30, 2004                                       |  | 5          
|               |  |                                                                                                                                                            
|               |  | Notes to Consolidated Financial Statements                                                                                                                  |  | 6          
|               |  |                                                                                                                                                            
|Item 2.        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                                                       |  | 13         
|               |  |                                                                                                                                                            
|Item 3.        |  | Quantitative and Qualitative Disclosures about Market Risk                                                                                                  |  | 19         
|               |  |                                                                                                                                                            
|Item 4.        |  | Controls and Procedures                                                                                                                                     |  | 19         
|               |  |                                                                                                                                                            
|PART II.       |  | OTHER INFORMATION:                                                                                                                                          |  |            
|               |  |                                                                                                                                                            
|Item 1.        |  | Legal Proceedings (not applicable)                                                                                                                          |  |            
|               |  |                                                                                                                                                            
|Item 2.        |  | Changes in Securities and Use of Proceeds                                                                                                                   |  | 20         
|               |  |                                                                                                                                                            
|Item 3.        |  | Defaults Upon Senior Securities (not applicable)                                                                                                            |  |            
|               |  |                                                                                                                                                            
|Item 4.        |  | Submission of Matters to a Vote of Security Holders (not applicable)                                                                                        |  |            
|               |  |                                                                                                                                                            
|Item 5.        |  | Other Information (not applicable)                                                                                                                          |  |            
|               |  |                                                                                                                                                            
|Item 6.        |  | Exhibits and Reports on Form 8-K                                                                                                                            |  | 21         
|               |  |                                                                                                                                                            
|Signatures     |  |                                                                                                                                                             |  | 24         
|               |  |                                                                                                                                                            
|Certifications |  |                                                                                                                                                             |  |            



2



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Apple REIT Six, Inc.

Consolidated Balance Sheets (unaudited)

(in thousands, except share data)



|                                                                                                                                     |  |               |         |   |                                          |   |   
|------------------------------------------------------------------------------------------------------------------------------------ |  | ------------- | ------- | - | ---------------------------------------- | - | --
|                                                                                                                                     |  | June 30, 2004 |         |   | January 20, 2004(initial capitalization)
|Assets                                                                                                                               |  |               |         |   |                                          |   |   
|Investment in properties, net of accumulated depreciation of $83                                                                     |  | $             | 24,003  |   |                                          | $ |  
|Cash and cash equivalents                                                                                                            |  |               | 89,686  |   |                                          |   | 24
|Restricted cash-furniture, fixtures and equipment escrow                                                                             |  |               | 275     |   |                                          |   |  
|Due from third party manager, net                                                                                                    |  |               | 222     |   |                                          |   |  
|Other assets                                                                                                                         |  |               | 626     |   |                                          |   |  
|                                                                                                                                     |  |               |         |   |                                          |   |   
|Total Assets                                                                                                                         |  | $             | 114,812 |   |                                          | $ | 24
|                                                                                                                                     |  |               |         |   |                                          |   |   
|Liabilities                                                                                                                          |  |               |         |   |                                          |   |   
|Accounts payable and accrued expenses                                                                                                |  | $             | 13      |   |                                          | $ |  
|                                                                                                                                     |  |               |         |   |                                          |   |   
|Total Liabilities                                                                                                                    |  |               | 13      |   |                                          |   |  
|Shareholders Equity                                                                                                                 |  |               |         |   |                                          |   |   
|Preferred stock, authorized 15,000,000 shares; none issued and outstanding                                                           |  |               |        |   |                                          |   |  
|Series A preferred stock, no par value, authorized 200,000,000 shares; issued and outstanding 11,963,473 and 10 shares,
respectively |  |               |        |   |                                          |   |  
|Series B preferred convertible stock, no par value, authorized 240,000 shares; issued and outstanding 240,000 shares,
respectively   |  |               | 24      |   |                                          |   | 24
|Common stock, no par value, authorized 200,000,000 shares; issued and outstanding 11,963,473 and 10 shares, respectively             |  |               | 115,609 |   |                                          |   |  
|Distributions greater than net income                                                                                                |  |               | (834    | ) |                                          |   |  
|                                                                                                                                     |  |               |         |   |                                          |   |   
|Total Shareholders Equity                                                                                                           |  |               | 114,799 |   |                                          |   | 24
|                                                                                                                                     |  |               |         |   |                                          |   |   
|Total Liabilities and Shareholders Equity                                                                                           |  | $             | 114,812 |   |                                          | $ | 24
|                                                                                                                                     |  |               |         |   |                                          |   |   



See notes to consolidated financial
statements.



3



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Apple REIT Six, Inc.

Consolidated Statement of Operations (unaudited)

(in thousands, except share data)



|                                              |  |                                 |       |   |                                                                             |   |       |  
|--------------------------------------------- |  | ------------------------------- | ----- | - | --------------------------------------------------------------------------- | - | ----- | -
|                                              |  | Three monthsended June 30, 2004 |       |   | For the periodJanuary 20, 2004(initial capitalization)through June 30, 2004 |  
|Revenue                                       |  |                                 |       |   |                                                                             |   |       |  
|Suite revenue                                 |  | $                               | 406   |   |                                                                             | $ | 406   |  
|Other revenue                                 |  |                                 | 21    |   |                                                                             |   | 21    |  
|                                              |  |                                 |       |   |                                                                             |   |       |  
|Total revenue                                 |  |                                 | 428   |   |                                                                             |   | 428   |  
|Expenses                                      |  |                                 |       |   |                                                                             |   |       |  
|Hotel operating expenses                      |  |                                 | 95    |   |                                                                             |   | 95    |  
|Hotel administrative expenses                 |  |                                 | 35    |   |                                                                             |   | 35    |  
|Sales and marketing                           |  |                                 | 30    |   |                                                                             |   | 30    |  
|Utilities                                     |  |                                 | 16    |   |                                                                             |   | 16    |  
|Repair and maintenance                        |  |                                 | 17    |   |                                                                             |   | 17    |  
|Management fees                               |  |                                 | 27    |   |                                                                             |   | 27    |  
|Taxes, insurance and other                    |  |                                 | 27    |   |                                                                             |   | 27    |  
|General and administrative                    |  |                                 | 135   |   |                                                                             |   | 138   |  
|Depreciation                                  |  |                                 | 83    |   |                                                                             |   | 83    |  
|                                              |  |                                 |       |   |                                                                             |   |       |  
|Total expenses                                |  |                                 | 463   |   |                                                                             |   | 466   |  
|                                              |  |                                 |       |   |                                                                             |   |       |  
|Operating loss                                |  |                                 | (35   | ) |                                                                             |   | (38   | )
|Interest income                               |  |                                 | 77    |   |                                                                             |   | 77    |  
|Interest expense                              |  |                                 | (2    | ) |                                                                             |   | (5    | )
|                                              |  |                                 |       |   |                                                                             |   |       |  
|Net income                                    |  | $                               | 40    |   |                                                                             | $ | 34    |  
|                                              |  |                                 |       |   |                                                                             |   |       |  
|Basic and diluted net income per common share |  | $                               | 0.01  |   |                                                                             | $ | 0.01  |  
|                                              |  |                                 |       |   |                                                                             |   |       |  
|Weighted average shares outstanding           |  |                                 | 5,779 |   |                                                                             |   | 3,251 |  
|Distributions paid per common share           |  | $                               | 0.11  |   |                                                                             | $ | 0.11  |  
|                                              |  |                                 |       |   |                                                                             |   |       |  



See notes to consolidated financial
statements.



4



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Apple REIT Six, Inc.

Consolidated Statement of Cash Flows (unaudited)

(in thousands)



|                                                                          |  |                                                                             |         |  
|------------------------------------------------------------------------- |  | --------------------------------------------------------------------------- | ------- | -
|                                                                          |  | For the periodJanuary 20, 2004(initial capitalization)through June 30,
2004 |        
|Cash flow from operating activities:                                      |  |                                                                             |         |  
|Net income                                                                |  | $                                                                           | 34      |  
|Adjustments to reconcile net income to cash used in operating activities: |  |                                                                             |         |  
|Depreciation                                                              |  |                                                                             | 83      |  
|Due from third party manager                                              |  |                                                                             | (222    | )
|Other assets and liabilities                                              |  |                                                                             | (380    | )
|                                                                          |  |                                                                             |         |  
|Net cash used in operating activities                                     |  |                                                                             | (485    | )
|Cash flow from investing activities:                                      |  |                                                                             |         |  
|Increase in cash restricted for capital improvements                      |  |                                                                             | (275    | )
|Cash paid for future acquisitions                                         |  |                                                                             | (234    | )
|Net cash paid for acquisitions                                            |  |                                                                             | (24,086 | )
|                                                                          |  |                                                                             |         |  
|Net cash used in investing activities                                     |  |                                                                             | (24,595 | )
|Cash flow from financing activities                                       |  |                                                                             |         |  
|Cash paid for offering costs                                              |  |                                                                             | (13,608 | )
|Proceeds from the issuance of common stock                                |  |                                                                             | 129,217 |  
|Cash distributions paid to common shareholders                            |  |                                                                             | (867    | )
|                                                                          |  |                                                                             |         |  
|Net cash provided by financing activities                                 |  |                                                                             | 114,742 |  
|Increase in cash and cash equivalents                                     |  |                                                                             | 89,662  |  
|Cash and cash equivalents, beginning of period                            |  |                                                                             | 24      |  
|                                                                          |  |                                                                             |         |  
|Cash and cash equivalents, end of period                                  |  | $                                                                           | 89,686  |  
|                                                                          |  |                                                                             |         |  



See notes to consolidated financial
statements.



5



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 1



Basis of Presentation



The accompanying unaudited consolidated financial statements have been prepared in
accordance with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information required by accounting principles generally accepted in the United States. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These unaudited financials should be read in conjunction with the Companys audited financial statements included in its
registration statement filed with the Securities and Exchange Commission. Operating results for the period ended June 30, 2004 are not necessarily indicative of the results that may be expected for the period ending December 31, 2004.



General Information and Summary of Significant Accounting Policies



Organization



Apple REIT Six, Inc. together with its wholly owned subsidiaries (the Company)
is a Virginia corporation that intends to qualify as a real estate investment trust (REIT) for federal income tax purposes. The Company, began operations and acquired its first hotel on May 28, 2004, was formed to invest in hotels,
residential apartment communities and other selected real estate in selected metropolitan areas in the United States. Initial capitalization occurred on January 20, 2004, when 10 shares of common stock and Series A preferred stock were purchased by
Apple Six Advisors, Inc. and 240,000 shares of Series B Preferred shares were purchased by Mr. Glade M. Knight. The Companys fiscal year end is December 31. The consolidated financial statements include the accounts of the Company and its
direct or indirect subsidiaries Apple Six Hospitality, Apple Six Residential, Apple Six Ventures and Apple Six Hospitality Management. All intercompany accounts and transactions have been eliminated.



Offering Costs



The Company is raising capital through a best-efforts offering of Units by David
Lerner Associates, Inc., which receives selling commissions and a marketing expense allowance based on proceeds of the shares sold.



Each Unit consists of one common share and one Series A preferred share. The Series A preferred shares will have no voting rights, no conversion rights and no
distribution rights. The only right associated with the Series A preferred shares will be a priority distribution upon the sale of the Companys assets. The priority would be equal to $11.00 per Series A preferred share, and no more, before any
distributions are made to the holders of any other shares. The Series A preferred shares will not be separately tradable from the common shares to which they relate.



From the Companys initial capitalization on January 20, 2004 through June 30, 2004, the Company incurred costs of approximately $13.6
million related to its offering. These costs are reflected as a reduction to shareholders equity. As of June 30, 2004, the Company has closed on a total of 11,963,473 Units, representing net proceeds of approximately $115,608,978.



6



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Earnings per Common Share



Basic earnings per common share is computed based upon the weighted average number of shares
outstanding during the year. Diluted earnings per share is calculated after giving effect to all potential common shares that were dilutive and outstanding for the year. Series B convertible shares are not included in earnings per common share until
such time it becomes probable that such shares can be converted to common shares.



Cash and cash equivalents



Cash and cash equivalents include highly liquid investments with original maturities of three months or less. The fair market value of cash and cash equivalents
approximate their carrying value. Cash equivalents are placed with high credit quality institutions and the balances may, at times, exceed federal depository insurance limits.



Comprehensive Income



The Company recorded no comprehensive income during the period reported.



Stock Incentive Plans



As the exercise price of the Companys stock options equals the market price of the underlying stock, the Company has not recognized
any stock compensation expenses associated with its stock options during the period from initial capitalization through June 30, 2004.



Revenue Recognition



Revenue is recognized as earned, which is generally defined as the date upon which a guest occupies a room or utilizes the hotels services.



Income Taxes



The Company intends to make an election to be treated, and expects to qualify, as a REIT
under the Internal Revenue Code of 1986, as amended. As a REIT, the Company will be allowed a deduction for the amount of dividends paid to its shareholders, thereby subjecting the distributed net income of the Company to taxation only at the
shareholder level. The Companys continued qualification as a REIT will depend on its compliance with numerous requirements, including requirements as to the nature of its income and distribution of dividends.



The Company has established Apple Six Hospitality Management, Inc. as a 100% owned taxable
REIT subsidiary (TRS). The TRS leases all hotels from the Company and is subject to income tax at regular corporate rates on any income that it earns. No income tax expense has been recorded for the period January 20, 2004 through June
30, 2004.



Start Up Costs



Start up costs incurred other than offering costs are expensed as incurred.



7



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Use of Estimates



The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.



Note 2



Summary of Acquisitions



Effective May 28, 2004, the Company closed on the purchase of a Springhill Suites by Marriott hotel in Ft. Worth, Texas, which contains 145 suites, and began operations
in May 2004. The hotel offers one and two room suites with the amenities generally offered by upscale extended-stay hotels. The gross purchase price of the hotel was $13.3 million, all cash.



Effective June 8, 2004, the Company closed on the purchase of a Courtyard by Marriott hotel
in Myrtle Beach, South Carolina, which contains 135 suites and was in operation when acquired. The hotel offers one and two room suites with the amenities generally offered by upscale extended-stay hotels. The gross purchase price of the hotel was
$9.2 million, all cash.



The aggregate gross purchase price of $22.5 million
for these hotels was funded by the Companys ongoing offering of units. The Company leased all of its hotels to its wholly-owned taxable REIT subsidiary under master hotel lease agreements. No goodwill or intangible assets were recorded in
connection with any of the acquisitions.



The Company also used the proceeds of
its ongoing offering to pay 2% of the aggregate gross purchase price for these hotels, which equals $450,800, as a brokerage commission to Apple Six Realty Group, Inc. (ASRG). This entity is owned by Glade M. Knight, who is one of the
Companys directors and its Chief Executive Officer. These costs have been capitalized to investment in properties.



Note 3



Line of Credit



During the first quarter of 2004, the Company obtained an unsecured line of credit in a principal amount of $400,000 to fund some of its offering expenses. The lender was
Wachovia Bank, N.A. On May 13, 2004, the line of credit was repaid in full and was extinguished.



Note 4



Related Parties



The Company is party to a property
acquisition and disposition agreement with ASRG, pursuant to which ASRG serves as real estate advisor in connection with the Companys acquisition and disposition of real estate assets. A fee of 2% of the gross purchase price or gross sale
price in



8



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addition to certain reimbursable expenses is payable for these services. As of June 30, 2004, $450,800 was paid to ASRG relating to the Companys recent
acquisitions.



The Company is party to an advisory agreement with Apple Six
Advisors, Inc. (ASA), pursuant to which ASA provides management services to the Company. An annual fee ranging from .1% to .25% of total equity proceeds received by the Company in addition to certain reimbursable expenses is payable for
these services. ASA in turn reimburses Apple Hospitality Two for costs associated with providing these services. As of June 30, 2004, $100,000 had been expensed under this agreement.



Glade M. Knight is Chairman and CEO of ASRG, Cornerstone Realty Investment Trust, Apple Hospitality Two, Apple Hospitality Five, and ASA.



Note 5



Series B Convertible Preferred Stock



The Company has issued 240,000 Series B convertible preferred shares to Glade M. Knight, Chairman, Chief Executive Officer and President of
the Company, in exchange for the payment by him of $0.10 per Series B convertible preferred share, or an aggregate of $24,000. The Series B convertible preferred shares are convertible into common shares pursuant to the formula and on the terms and
conditions set forth below.



There are no dividends payable on the Series B
convertible preferred shares. Holders of more than two-thirds of the Series B convertible preferred shares must approve any proposed amendment to the articles of incorporation that would adversely affect the Series B convertible preferred shares.



Upon the Companys liquidation, the holder of the Series B convertible
preferred shares is entitled to a priority liquidation payment before any distribution of liquidation proceeds to the holders of the common shares. However, the priority liquidation payment of the holder of the Series B convertible preferred shares
is junior to the holders of the Series A preferred shares distribution rights. The holder of a Series B convertible preferred share is entitled to a liquidation payment of $11 per number of common shares each Series B convertible preferred share
would be convertible into according to the formula described below. In the event that the liquidation of the Companys assets results in proceeds that exceed the distribution rights of the Series A preferred shares and the Series B convertible
preferred shares, the remaining proceeds will be distributed between the common shares and the Series B convertible preferred shares, on an as converted basis.



Each holder of outstanding Series B convertible preferred shares shall have the right to convert any of such shares into Common Shares of the Company upon and for 180
days following the occurrence of any of the following events:



(1) substantially all of the Companys assets, stock or business is sold or transferred through exchange, merger, consolidation, lease, share exchange, sale or otherwise, other than a sale of assets in
liquidation, dissolution or winding up of the Company;



(2) the termination or expiration without renewal of the advisory agreement, or if the Company ceases to use ASRG to provide property acquisition and disposition services; or



9



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(3) the Companys common shares are listed on any securities exchange or quotation
system or in any established market.



Upon the occurrence of any conversion
event, each Series B convertible preferred share may be converted into a number of common shares based upon the gross proceeds raised through the date of conversion in the $1 billion offering made by this prospectus according to the following table:



|                                                                     |  |                                                                                       
|-------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------
|Gross Proceeds Raised from Sales of Units through Date of Conversion |  | Number of Common Shares through Conversion of One Series B Convertible Preferred Share
|$100 million                                                         |  | 1.83239                                                                               
|$150 million                                                         |  | 3.19885                                                                               
|$200 million                                                         |  | 4.83721                                                                               
|$250 million                                                         |  | 6.11068                                                                               
|$300 million                                                         |  | 7.29150                                                                               
|$350 million                                                         |  | 8.49719                                                                               
|$400 million                                                         |  | 9.70287                                                                               
|$450 million                                                         |  | 10.90855                                                                              
|$500 million                                                         |  | 12.11423                                                                              
|$550 million                                                         |  | 13.31991                                                                              
|$600 million                                                         |  | 14.52559                                                                              
|$650 million                                                         |  | 15.73128                                                                              
|$700 million                                                         |  | 16.93696                                                                              
|$750 million                                                         |  | 18.14264                                                                              
|$800 million                                                         |  | 19.34832                                                                              
|$850 million                                                         |  | 20.55400                                                                              
|$900 million                                                         |  | 21.75968                                                                              
|$950 million                                                         |  | 22.96537                                                                              
|$1 billion                                                           |  | 24.17104                                                                              



In the event that after raising gross
proceeds of $1 billion, the Company raises additional gross proceeds in a subsequent public offering, each Series B convertible preferred share may be converted into an additional number of common shares based on the additional gross proceeds raised
through the date of conversion in a subsequent public offering according to the following formula: (X/50 million) x 1.20568, where X is the additional gross proceeds rounded down to the nearest 50 million.



No additional consideration is due upon the conversion of the Series B convertible preferred
shares. The conversion into common shares of the Series B convertible preferred shares will result in dilution of the shareholders interests.



Compensation expense related to issuance of 240,000 Series B convertible preferred shares to Mr. Knight will be recognized at such time when the number of common shares
to be issued for conversion of the Series B shares can be reasonably estimated and the event triggering the conversion of the Series B shares to common shares is probable. The expense will be measured as the difference between the fair value of the
common stock for which the Series B shares can be converted and the amounts paid for the Series B shares. Although the fair market value cannot be



10



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determined at this time, compensation expense if the maximum offering is achieved could range from $0 to in excess of $63 million (assumes $11 per unit fair
market value).



Note 6



Management Agreements



The Companys Marriott brand hotels are subject to management agreements under which
Marriott or its affiliates (the Manager) manages the hotels and provides the Company access to Marriotts intellectual property and proprietary sales and reservation system, generally for an initial term of 30 years with renewal
terms at the option of the Company or the Manager of up to 3 additional 10 year terms. The agreements generally provide for payment of base management fees, which are calculated annually and are a percentage of sales, incentive management fees over
a priority return (as defined in the management agreements), system fees, marketing fees and chain services. Additionally, these agreements have termination provisions for the Company if certain operating results are not achieved.



Total expenses incurred through June 30, 2004 for management fees and franchise fees were
$26,537. These expenses are included in management fees in the consolidated statements of operation.



Note 7



Pro Forma Information



The following unaudited pro forma
information for the six months ended June 30, 2004, is presented as if the acquisitions of the 2 hotels occurred on January 1, 2004. The pro forma information does not purport to represent what the Companys results of operations would actually
have been if such transactions, in fact, had occurred on January 1, 2004, nor does it purport to represent the results of operations for future periods.



|                                       |  |                                                      |      
|-------------------------------------- |  | ---------------------------------------------------- | -----
|                                       |  | For the period January 20, 2004through June 30, 2004
|                                       |  | (in thousands, except per share data)               
|Hotel revenues                         |  | $                                                    | 1,378
|Net income                             |  | $                                                    | 84   
|Net income per share-basic and diluted |  | $                                                    | 0.03 



The pro forma information reflects
adjustments for actual revenues and expenses of the 2 hotels acquired as of June 30, 2004 for the respective period in 2004 prior to acquisition by the Company. Net income has been adjusted as follows: (1) depreciation has been adjusted based on the
Companys basis in the hotels; (2) advisory expenses have been adjusted based on the Companys contractual arrangements; (3) common stock raised during 2004 to purchase these hotels has been adjusted to reflect issuances as of January 20,
2004.



11



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Note 8



Subsequent Events



In July 2004, the Company paid $441,783 or $.073 per share, in a distribution to its common shareholders.



In July 2004, the Company acquired the Redmond Marriott Town Center in Redmond, Washington for a gross purchase price of $64 million, all
cash. The hotel contains a total of 262 rooms, of which 4 are suites, and offers amenities generally offered by upscale full-service hotels.



In July 2004, the Company closed on an additional 2,925,036 shares, representing gross proceeds of $32,175,401 and proceeds net of selling and marketing costs of
$28,957,861.



Note 9



Industry Segments



As of June 30, 2004, the Company owned two extended-stay hotels that generate rental and
other property related income. The Company separately evaluates the performance of each of its hotel properties. However, because each of the hotel properties has similar economic characteristics, facilities, and services, the properties have been
aggregated into a single segment. All segment disclosure is included in or can be derived from the Companys consolidated financial statements.



12



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|Item 2. | Managements Discussion And Analysis Of Financial Condition And Results Of Operation
|------- | ------------------------------------------------------------------------------------



This quarterly report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Such Statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of the Company to be materially
different from future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include the ability of the Company to implement its acquisition strategy and operating strategy; the Companys
ability to manage planned growth; changes in economic cycles and competition within the extended-stay hotel industry. Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any
of the assumptions could be inaccurate, and therefore there can be no assurance that such statements included in the quarterly report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements
included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the results or conditions described in such statements or the objectives and plans of the Company will be achieved.
In addition, the Companys qualification as a real estate investment trust involves the application of highly technical and complex provisions of the Internal Revenue Code. Readers should carefully review the Companys financial statements
and the notes thereto, as well as the risk factors described in the Companys filings with the Securities and Exchange Commission.



Overview



Apple REIT Six, Inc. (together with its wholly owned subsidiaries, the Company), is a Virginia corporation that intends to qualify as a real estate investment
trust (REIT) for federal income tax purposes. The Company, which owns two properties and has a limited operating history, was formed to invest in hotels, residential apartment communities and other selected real estate in selected
metropolitan areas in the United States. Initial capitalization occurred on January 20, 2004, when 10 shares of common stock and Series A preferred stock were purchased by Apple Six Advisors, Inc. and 240,000 shares of Series B Preferred shares were
purchased by Mr. Glade M. Knight, the Companys Chairman, Chief Executive Officer and President. The Companys fiscal year end is December 31. The consolidated financial statements include the accounts of the Company and its direct or
indirect subsidiaries Apple Six Hospitality, Apple Six Residential, Apple Six Ventures and Apple Six Hospitality Management. All intercompany accounts and transactions have been eliminated. The performance of the Companys hotels can be
influenced by many factors, including local hotel competition, local and national economic conditions and the performance of the individual managers assigned to its hotels. In evaluating financial condition and operating performance, the most
important matters on which the Company focuses are revenue measurements, such as average occupancy, average daily rate and revenue per available room, and expenses, such as hotel operating expenses, general and administrative and other expenses
described below.



Hotels Owned



The Company commenced operations in May 2004 upon the purchase of its first
hotel property. As of June 30, 2004, the Company owned a total of 2 hotel properties, with a total of 280 suites.



13



---

The following table summarizes the locations of and number of suites for the 2 hotels the Company owned at June 30, 2004:



|             |  |                |  |                    |  |              |  |            
|------------ |  | -------------- |  | ------------------ |  | ------------ |  | -----------
|City         |  | State          |  | Franchise/Brand    |  | DateAcquired |  | # of Suites
|Fort Worth   |  | Texas          |  | Springhill Suites® |  | May 2004     |  | 145        
|Myrtle Beach |  | South Carolina |  | Courtyard®         |  | June 2004    |  | 135        
|             |  |                |  |                    |  |              |  |            
|             |  |                |  |                    |  |              |  | 280        
|             |  |                |  |                    |  |              |  |            



The purchase price for all of the
hotels was funded by the Companys ongoing best efforts offering of Units. The Company leases all of its hotels to its wholly-owned taxable REIT subsidiary under hotel lease agreements. The Company also used the proceeds of its offering to pay
$450,800, approximately 2% of the gross purchase price for these hotels, as a commission to Apple Six Realty Group, Inc. (ASRG), 100% owned by Glade M. Knight, the Companys Chairman and Chief Operating Officer.



No goodwill or intangible assets were recorded in connection with any of the acquisitions.



Management Agreements



The Companys Marriott brand hotels are subject to management agreements under which
Marriott or its affiliates (the Manager) manages the hotels and provides the Company access to Marriotts intellectual property and proprietary sales and reservation system, generally for an initial term of 30 years with renewal
terms at the option of the Company or the Manager of up to 3 additional 10 year terms. The agreements generally provide for payment of base management fees, which are calculated annually and are a percentage of sales, incentive management fees over
a priority return (as defined in the management agreements), system fees, marketing fees and chain services. Additionally, these agreements have termination provisions for the Company if certain operating results are not achieved.



Total expenses incurred during the through June 30, 2004 for management fees and franchise
fees were $26,537. These expenses are included in management fees in the consolidated statements of operation.



Results of Operations



Since operations commenced on May 28, 2004, with the Companys first acquisition, a comparison to prior year results is not possible. In general, the performance of
the Companys hotels have met expectations for the short period held. Hotel performance is impacted by many factors including local hotel competition and local and national economic conditions in the United States. As a result, there can be no
assurance that the Companys operating performance will continue to meet expectations.



Revenues



The Companys principal source of revenue is hotel suites revenue and related other revenue. Hotel operations included were for the 2 hotels acquired through June
30, 2004 and the respective periods owned. For the period from January 20, 2004 (initial capitalization) through June 30, 2004, the Company had suite revenue and other revenue of $406,496 and $21,389, respectively.



14



---

For the period acquired through June 30, 2004, the hotels achieved average occupancy of 59.9%, ADR of $97.50 and RevPAR
of $58.32. ADR, or average daily rate, is calculated as room revenue divided by the number of rooms sold, and RevPAR, or revenue per available room, is calculated as occupancy multiplied by ADR.



For the period from January 20, 2004 (initial capitalization) through June 30, 2004, the
Company had interest income of $76,809. Interest income represents earnings on excess cash invested in short term money market instruments.



Expenses



For the period from January 20, 2004 (initial capitalization) through June 30, 2004, hotel direct expenses of the hotels totaled $218,724 or 54% of suite revenue. This
expense as a percentage of sales is expected to decline as revenue ramps up for newly acquired properties.



Taxes, insurance, and other expense for the period from January 20, 2004 (initial capitalization) through June 30, 2004 was $26,982 or 7% of suite revenue.



General and administrative expense for the period from January 20, 2004 (initial capitalization) through June 30, 2004 was $137,545 or 34%
of suite revenue. The Company anticipates this percentage to continue to decrease as its asset base grows.



Depreciation expense for the period from January 20, 2004 (initial capitalization) through June 30, 2004 was $82,830. This amount represents depreciation expense of its 2 hotels and related personal property for the
respective periods owned.



Liquidity and
Capital Resources



The Company is raising capital through a
best-efforts offering of Units by David Lerner Associates, Inc. (the Managing Dealer), which receives selling commissions and a marketing expense allowance based on proceeds of the shares sold.



Each Unit consists of one common share and one Series A preferred share. The Series A
preferred shares will have no voting rights, no conversion rights and no distribution rights. The only right associated with the Series A preferred shares will be a priority distribution upon the sale of the Companys assets. The priority would
be equal to $11.00 per Series A preferred share, and no more, before any distributions are made to the holders of any other shares. The Series A preferred shares will not be separately tradable from the common shares to which they relate.



From the Companys initial capitalization on January 20, 2004 through
June 30, 2004, the Company incurred costs of approximately $13,608,272 related to its offering. These costs are reflected as a reduction to shareholders equity. As of June 30, 2004, the Company has closed on a total of 11,963,473 Units,
representing gross proceeds and proceeds net of selling and marketing fees of approximately $129,217,250 and $115,608,978, respectively.



Through June 30, 2004, the Company had paid dividends totaling approximately $867,000 or $0.11 per share. As the Company did not acquire its first hotel until May 28,
2004, substantially the entire dividend was a return of capital. The Company intends to continue paying dividends on a monthly basis at an annual rate of 8%; however, since there can be no assurance of the Companys ability to acquire
properties that provide income at this level, there can be no assurance as to the classification or duration of the dividend at this rate.



15



---

The Company intends to acquire real estate properties with its available cash. Although the Company is currently
performing due diligence on several possible acquisitions, the timing of finding suitable properties is dependant upon many external factors and there can be no assurances as to the length of time to utilize all proceeds of its best-efforts offering
for investment in Real Estate. The Companys proceeds raised and not invested in Real Estate are held as cash or cash equivalents.



Related Party Transactions



The Company is party to a property acquisition and disposition agreement with ASRG, pursuant to which ASRG serves as real estate advisor in connection with the
Companys acquisition and disposition of real estate assets. A fee of 2% of the gross purchase price or gross sale price in addition to certain reimbursable expenses is payable for these services. As of June 30, 2004, $450,800 was paid to ASRG
relating to the Companys recent acquisitions.



The Company is party to an
advisory agreement with Apple Six Advisors, Inc. (ASA), pursuant to which ASA provides management services to the Company. An annual fee ranging from .1% to .25% of total equity proceeds received by the Company in addition to certain
reimbursable expenses is payable for these services. ASA in turn reimburses Apple Hospitality Two for costs associated with providing these services. As of June 30, 2004, $100,000 had been expensed under this agreement.



Glade M. Knight is Chairman and CEO of ASRG, Cornerstone Realty Investment Trust, Apple
Hospitality Two, Apple Hospitality Five, and ASA.



Series B Convertible Preferred Stock



The Company has
authorized 240,000 shares of Series B convertible preferred stock. The Company has issued 240,000 Series B convertible preferred shares to Glade M. Knight, Chairman, Chief Executive Officer and President of the Company, in exchange for the payment
by him of $0.10 per Series B convertible preferred share, or an aggregate of $24,000. The Series B convertible preferred shares are convertible into common shares pursuant to the formula and on the terms and conditions set forth below.



There are no dividends payable on the Series B convertible preferred shares. Holders of
more than two-thirds of the Series B convertible preferred shares must approve any proposed amendment to the articles of incorporation that would adversely affect the Series B convertible preferred shares.



Upon the Companys liquidation, the holder of the Series B convertible preferred shares
is entitled to a priority liquidation payment before any distribution of liquidation proceeds to the holders of the common shares. However, the priority liquidation payment of the holder of the Series B convertible preferred shares is junior to the
holders of the Series A preferred shares distribution rights. The holder of a Series B convertible preferred share is entitled to a liquidation payment of $11 per number of common shares each Series B convertible preferred share would be convertible
into according to the formula described below. In the event that the liquidation of the Companys assets results in proceeds that exceed the distribution rights of the Series A preferred shares and the Series B convertible preferred shares, the
remaining proceeds will be distributed between the common shares and the Series B convertible preferred shares, on an as converted basis.



16



---

Each holder of outstanding Series B convertible preferred shares shall have the right to convert any of such shares into
Common Shares of the Company upon and for 180 days following the occurrence of any of the following events:



(1) substantially all of the Companys assets, stock or business is sold or transferred through exchange, merger, consolidation,
lease, share exchange, sale or otherwise, other than a sale of assets in liquidation, dissolution or winding up of the Company;



(2) the termination or expiration without renewal of the advisory agreement, or if the Company ceases to use ASRG to provide property
acquisition and disposition services; or



(3)
the Companys common shares are listed on any securities exchange or quotation system or in any established market.



Upon the occurrence of any conversion event, each Series B convertible preferred share may be converted into a number of common shares based upon the gross proceeds
raised through the date of conversion in the $1 billion offering made by this prospectus according to the following table:



|                                                                     |  |                                                                                       
|-------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------
|Gross Proceeds Raised from Sales of Units through Date of Conversion |  | Number of Common Shares through Conversion of One Series B Convertible Preferred Share
|$100 million                                                         |  | 1.83239                                                                               
|$150 million                                                         |  | 3.19885                                                                               
|$200 million                                                         |  | 4.83721                                                                               
|$250 million                                                         |  | 6.11068                                                                               
|$300 million                                                         |  | 7.29150                                                                               
|$350 million                                                         |  | 8.49719                                                                               
|$400 million                                                         |  | 9.70287                                                                               
|$450 million                                                         |  | 10.90855                                                                              
|$500 million                                                         |  | 12.11423                                                                              
|$550 million                                                         |  | 13.31991                                                                              
|$600 million                                                         |  | 14.52559                                                                              
|$650 million                                                         |  | 15.73128                                                                              
|$700 million                                                         |  | 16.93696                                                                              
|$750 million                                                         |  | 18.14264                                                                              
|$800 million                                                         |  | 19.34832                                                                              
|$850 million                                                         |  | 20.55400                                                                              
|$900 million                                                         |  | 21.75968                                                                              
|$950 million                                                         |  | 22.96537                                                                              
|$1 billion                                                           |  | 24.17104                                                                              



In the event that after raising gross
proceeds of $1 billion, the Company raises additional gross proceeds in a subsequent public offering, each Series B convertible preferred share may be converted into an additional number of common shares based on the additional gross proceeds raised
through the date of conversion in a subsequent public offering according to the following formula: (X/50 million) x 1.20568, where X is the additional gross proceeds rounded down to the nearest 50 million.



17



---

No additional consideration is due upon the conversion of the Series B convertible preferred shares. The conversion into
common shares of the Series B convertible preferred shares will result in dilution of the shareholders interests.



Compensation expense related to issuance of 240,000 Series B convertible preferred shares to Mr. Knight will be recognized at such time when the number of common shares
to be issued for conversion of the Series B shares can be reasonably estimated and the event triggering the conversion of the Series B shares to common shares is probable. The expense will be measured as the difference between the fair value of the
common stock for which the Series B shares can be converted and the amounts paid for the Series B shares. Although the fair market value cannot be determined at this time, compensation expense if the maximum offering is achieved could range from $0
to in excess of $63 million (assumes $11 per unit fair market value).



Subsequent Events



In July 2004, the
Company paid $441,783 or $.073 per share, in a distribution to its common shareholders.



In July 2004, the Company acquired the Redmond Marriott Town Center in Redmond, Washington for a gross purchase price of $64 million. The hotel contains a total of 262 rooms, of which 4 are suites, and offers amenities generally offered by
upscale full-service hotels.



In July 2004, the Company closed on an additional
2,925,036 shares, representing gross proceeds of $32,175,401 and proceeds net of selling and marketing costs of $28,957,861.



Impact of Inflation



Operators of hotels, in general, possess the ability to adjust room rates daily to reflect the effects of inflation. Competitive pressures may, however, limit the
operators ability to raise room rates. Currently the Company is not experiencing any material impact from inflation.



Seasonality



The hotel industry historically has been seasonal in nature. Seasonal variations in occupancy at its hotels may cause quarterly fluctuations in its revenues. To the
extent that cash flow from operations is insufficient during any quarter, due to temporary or seasonal fluctuations in revenue, the Company expects to utilize cash on hand to make distributions.



18



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|Item 3. | Quantitative and Qualitative Disclosure About Market Risk
|------- | ---------------------------------------------------------



The Company does not engage in transactions in derivative financial instruments or derivative commodity instruments. As of June 30, 2004, the Companys financial
instruments were not exposed to significant market risk due to interest rate risk, foreign currency exchange risk, commodity price risk or equity price risk. The Company will be exposed to changes in short term money market rates as it invests the
proceeds from its sale of Units pending use in acquisitions. Based on the Companys cash invested at June 30, 2004, of $89,686,486, every 100 basis points change in interest rates will impact the Companys annual net income by
approximately $896,865, all other factors remaining the same. Cash invested pending acquisitions will vary substantially during the coming year based on the amount of proceeds raised and the timing of acquisitions.



|Item 4. | Controls and Procedures
|------- | -----------------------



Senior management, including the Chief Executive Officer and Chief Accounting Officer, evaluated the effectiveness of the Companys disclosure controls and
procedures as of the end of the period covered by this report. Based on this evaluation process, the Chief Executive Officer and Chief Accounting Officer have concluded that the Companys disclosure controls and procedures are effective and
that there have been no changes in the Companys internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Companys internal
control over financial reporting. Since that evaluation process was completed, there have been no significant changes in internal controls or in other factors that could significantly affect these controls.



19



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PART II. OTHER INFORMATION



|Item 2. | Changes in Securities and Use of Proceeds
|------- | -----------------------------------------



The following tables set forth information concerning the Offering and the use of proceeds from the Offering as of June 30, 2004:



Units Registered:



|        |  |            |  |       |  |                 |  |   |              
|------- |  | ---------- |  | ----- |  | --------------- |  | - | -------------
|        |  | 4,761,905  |  | Units |  | $10.50 per Unit |  | $ | 50,000,000   
|        |  | 86,363,636 |  | Units |  | $11 per Unit    |  |   | 950,000,000  
|        |  |            |  |       |  |                 |  |   |              
|Totals: |  | 91,125,541 |  | Units |  |                 |  | $ | 1,000,000,000



Units Sold:



|        |  |            |  |       |  |                 |  |   |            
|------- |  | ---------- |  | ----- |  | --------------- |  | - | -----------
|        |  | 4,761,905  |  | Units |  | $10.50 per Unit |  | $ | 50,000,000 
|        |  | 7,201,568  |  | Units |  | $11 per Unit    |  |   | 79,217,140 
|        |  |            |  |       |  |                 |  |   |            
|Totals: |  | 11,963,473 |  | Units |  |                 |  | $ | 129,217,140



Expenses of Issuance and Distribution of Units

|                                                                                                                                                              |  |   |            
|------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | -----------
|                                                                                                                                                              | 
|1.      Underwriting discounts and commission                                                                                                                 |  | $ | 12,921,714 
|2.      Expenses of underwriters                                                                                                                              |  |   |           
|3.      Direct or indirect payments to directors or officers of the Company or their associates, to ten percent
shareholders, or to affiliates of the Company |  |   |           
|4.      Fees and expenses of third parties                                                                                                                    |  |   | 686,558    
|                                                                                                                                                              |  |   |            
|Total Expenses of Issuance and Distribution of Common Shares                                                                                                  |  | $ | 13,608,272 
|                                                                                                                                                              |  |   |            
|Net Proceeds to the Company                                                                                                                                   |  | $ | 115,608,868
|                                                                                                                                                              |  |   |            
|1.      Purchase of real estate (including repayment of indebtedness incurred to purchase real
estate)                                                        |  | $ | 24,086,006 
|2.      Interest on indebtedness                                                                                                                              |  |   |           
|3.      Working capital                                                                                                                                       |  |   | 91,072,062 
|4.      Fees to the following (all affiliates of officers of the Company):                                                                                    |  |   |           
|Apple Suites Realty Group, Inc.                                                                                                                               |  |   | 450,800    
|5.      Fees and expenses of third parties:                                                                                                                   |  |   |            
|a.      Legal                                                                                                                                                 |  |   |           
|b.      Accounting                                                                                                                                            |  |   |           
|6.      Other                                                                                                                                                 |  |   |           
|                                                                                                                                                              |  |   |            
|Total of Application of Net Proceeds to the Company                                                                                                           |  | $ | 115,608,868
|                                                                                                                                                              |  |   |            



20



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



|              |  |                                                                                                                                                                                                                                                                                                                                                                           
|------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                                                                                                                                                                                                                                               
|1.1           |  | Agency agreement between the Registrant and David Lerner Associates, Inc. with form of selected Dealer Agreement attached as Exhibit A thereto. (Incorporated by reference to Exhibit 1.1 to
the registrants quarterly report on Form 10-Q (SEC file No. 333-112169) filed May 13, 2004)                                                                                 
|              | 
|1.2           |  | Form of Escrow Agreement. (Incorporated by reference to Exhibit 1.2 to the registrants quarterly report on Form 10-Q (SEC File No. 333-112169) filed May 13, 2004)                                                                                                                                                                                                       
|              | 
|3.1           |  | Articles of Incorporation of the Registrant. (Incorporated by reference to Exhibit 3.1 to the registrants registration statement on Form S-11 (SEC File No. 333-112169) effective April
23, 2004)                                                                                                                                                                        
|              | 
|3.2           |  | Bylaws of the Registrant. (Incorporated by reference to Exhibit 3.2 to the registrants registration statement on Form S-11 (SEC File No. 333-112169) effective April 23,
2004)                                                                                                                                                                                           
|              | 
|5.1           |  | Opinion of McGuireWoods LLP as to the legality of the securities being registered. (Incorporated by reference to Exhibit 5.1 to the registrants registration statement on Form S-11 (SEC
File No. 333-112169) effective April 23, 2004)                                                                                                                                  
|              | 
|8.1           |  | Opinion of McGuireWoods LLP as to certain tax matters. (Incorporated by reference to Exhibit 8.1 to the registrants registration statement on Form S-11 (SEC File No. 333-112169)
effective April 23, 2004)                                                                                                                                                              
|              | 
|10.1          |  | Management Agreement dated as of May 28, 2004 between Springhill SMC Corporation and Apple Six Services, L.P. (Incorporated by reference to Exhibit 10.1 to the Post-Effective Amendment No. 2
to the Registrants Registration Statement o Form S-11 (SEC File No. 333-112169) filed on July 29, 2004)                                                                   
|              | 
|10.2          |  | Owner Agreement dated as of May 28, 2004 among Apple Six Hospitality Texas, L.P., Apple Six Services, L.P. and Springhill SMC Corporation (Incorporated by reference to Exhibit 10.2 to the
Post-Effective Amendment No. 2 to the Registrants Registration Statement o Form S-11 (SEC File No. 333-112169) filed on July 29, 2004)                                       
|              | 
|10.3          |  | Hotel Lease Agreement dated as of May 28, 2004 between Apple Six Hospitality Texas, L.P. and Apple Six Services, L.P. regarding the Fort Worth, Texas  Spring Hill Suites hotel
(Incorporated by reference to Exhibit 10.3 to the Post-Effective Amendment No. 2 to the Registrants Registration Statement o Form S-11 (SEC File No. 333-112169) filed on July 29, 2004)
|              | 
|10.4          |  | Management Agreement dated as of June 8, 2004 between Courtyard Management Corporation and Apple Six Hospitality Management, Inc. (Incorporated by reference to Exhibit 10.4 to the
Post-Effective Amendment No. 2 to the Registrants Registration Statement o Form S-11 (SEC File No. 333-112169) filed on July 29, 2004)                                               



21



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|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.5  |  | Owner Agreement dated as of June 8, 2004, but effective as of June 19, 2004, among Apple Six Hospitality, Inc., Apple Six Hospitality Management, Inc. and Courtyard Management Corporation
(Incorporated by reference to Exhibit 10.5 to the Post-Effective Amendment No. 2 to the Registrants Registration Statement o Form S-11 (SEC File No. 333-112169) filed on July 29, 2004)                                                                                                                                                                                                                                            
|      | 
|10.6  |  | Schedule of information for substantially identical Hotel Lease Agreement dated as of June 8, 2004 between Apple Six Hospitality, Inc. and Apple Six Hospitality Management, Inc. regarding the
Myrtle Beach, South Carolina hotel (Incorporated by reference to Exhibit 10.6 to the Post-Effective Amendment No. 2 to the Registrants Registration Statement o Form S-11 (SEC File No. 333-112169) filed on July 29, 2004)                                                                                                                                                                                                     
|      | 
|10.7  |  | Management Agreement dated as of July 22, 2002 between Marriott International, Inc. and Redmar Property, L.P., as assigned by Consent, Assignment and Assumption and Amendment of Management
Agreement dated as of July 6, 2004, but effective June 12, 2004, among Marriott International, Inc., Redmar Property, L.P., Apple Six Hospitality Management, Inc. and Apple Six Hospitality, Inc. regarding the Redmond, Washington hotel (Incorporated
by reference to Exhibit 10.7 to the Post-Effective Amendment No. 2 to the Registrants Registration Statement o Form S-11 (SEC File No. 333-112169) filed on July 29, 2004)
|      | 
|10.8  |  | Owner Agreement dated as of July 6, 2004, but effective as of June 12, 2004, among apple Six Hospitality Management, Inc., Apple Six Hospitality, Inc. and Marriott International, Inc.
(Incorporated by reference to Exhibit 10.8 to the Post-Effective Amendment No. 2 to the Registrants Registration Statement o Form S-11 (SEC File No. 333-112169) filed on July 29, 2004)                                                                                                                                                                                                                                                
|      | 
|10.9  |  | Hotel Lease Agreement dated as of June 12, 2004 between Apple Six Hospitality Management, Inc. (Incorporated by reference to Exhibit 10.9 to the Post-Effective Amendment No. 2 to the
Registrants Registration Statement o Form S-11 (SEC File No. 333-112169) filed on July 29, 2004)                                                                                                                                                                                                                                                                                                                                         
|      | 
|10.10 |  | Advisory Agreement between the Registrant and Apple Six Advisors, Inc. (Incorporated by reference to Exhibit 10.1 to the registrants quarterly report on Form 10-Q (SEC File No.
333-112169) filed May 13, 2004)                                                                                                                                                                                                                                                                                                                                                                                                                
|      | 
|10.11 |  | Property Acquisition/Disposition Agreement between the Registrant and Apple Six Realty Group, Inc. (Incorporated by reference to Exhibit 10.2 to the registrants quarterly report on Form
10-Q (SEC File NO. 333-112169) filed May 13, 2004)                                                                                                                                                                                                                                                                                                                                                                                    
|      | 
|10.12 |  | Apple REIT Six, Inc. 2004 Incentive Plan. (Incorporated by reference to Exhibit 10.3 to the registrants quarterly report on Form 10-Q (SEC File No. 333-112169) filed May 13,
2004)                                                                                                                                                                                                                                                                                                                                                                                                                                             
|      | 
|10.13 |  | Apple REIT Six, Inc. 2004 Non-Employee Directors Stock Option Plan. (Incorporated by reference to Exhibit 10.3 to the registrants quarterly report on Form 10-Q (SEC File No. 333-112169)
filed May 13, 2004)                                                                                                                                                                                                                                                                                                                                                                                                                   
|      | 
|31.1  |  | Certification of the registrants Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (FILED HEREWITH).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            



22



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|     |  |                                                                                                                                                                                    
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.2 |  | Certification of the Companys Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Action of 2002 (FILED HEREWITH).                                              
|     | 
|32.1 |  | Certification of the Companys Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (FILED
HEREWITH).   
|     | 
|32.2 |  | Certification of the Companys Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Action of 2002 (FILED
HEREWITH).



Reports on Form 8-K



|(1) | On June 14, 2004, the Company filed a current report on Form 8-K, reporting under Items 2 and 7 reporting the acquisitions of the Springhill Suites by Marriott Fort Worth, Texas and
the Courtyard by Marriott Myrtle Beach, South Carolina.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | On July 21, 2004, the Company filed a current report on Form 8-K reporting under Items 2 and 7 reporting the acquisition of the Marriott hotel in Redmond, Washington.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



23



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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.



|                     |  |                                                                                                              |  |  |  |  |  |                     
|-------------------- |  | ------------------------------------------------------------------------------------------------------------ |  |  |  |  |  | --------------------
|Apple REIT Six, Inc. |  |                                                                                                              |  | 
|                     |  |                                                                                                              |  | 
|By:                  |  | /s/ Glade M. Knight                                                                                          |  |  |  |  |  | Date: August 4, 2004
|                     |  | Glade M. Knight, Chairman of the Board, Chief Executive Officer, and President (Principal Executive
Officer) |  |  |  |  |  |                     



|    |  |                                                                                              |  |  |  |  |  |                     
|--- |  | -------------------------------------------------------------------------------------------- |  |  |  |  |  | --------------------
|    |  |                                                                                              |  | 
|By: |  | /s/ Bryan Peery                                                                              |  |  |  |  |  | Date: August 4, 2004
|    |  | Bryan Peery, Chief Accounting Officer (Principal Financial and Principal Accounting Officer) |  |  |  |  |  |                     



24