This report is the second of a series of annual reports by the National Education Policy Center (NEPC) on virtual education in the U.S. The NEPC reports contribute to the existing evidence and discourse on virtual education by providing an objective analysis of the evolution and performance of full-time, publicly funded K-12 virtual schools. This report is organized in three major sections. Section I examines the policy and political landscape associated with virtual schooling and describes the current state of affairs related to finance and governance, instructional program quality, and teacher quality. The authors analyze to what extent, if any, policy in the past year has moved toward or away from the 2013 recommendations. Section II reviews the research relevant to virtual schools. It finds that despite considerable enthusiasm for virtual education in some quarters, there is little credible research to support virtual schools' practices or to justify ongoing calls for ever-greater expansion. Section III provides a descriptive overview of full-time virtual schools and their expansion based on data gathered from state, corporate, and organizational sources. Details on enrollment include the student characteristics of race/ethnicity, sex, free and reduced-price lunch eligibility, special education designation, ELL status, and grade level. Other information includes student-teacher ratios. In addition, details on student achievement include Adequate Yearly Progress (AYP) ratings, state ratings, and graduation rates. The following appendices are available for download: (1) Summaries of Legislation Pertaining to Virtual Schools, 2012 and 2013; (2) Numbers of Full-time Virtual Schools and the Students They Serve by State; and (3) Measures of School Performance: State Performance Ratings, Adequate Yearly Progress Status, and Graduation Rates. http://nepc.colorado.edu/publication/virtual-schools-annual-2014 (Each section contains a list of notes and references.) [For the 2013 report, "Virtual Schools in the U.S. 2013: Politics, Performance, Policy, and Research Evidence," see ED558723.] [Contributors of the research brief include: Luis Huerta, Jennifer King Rice, Sheryl Rankin Shafer, Michael K. Barbour, Gary Miron, Charisse Gulosino, and Brian Horvitz.]