My work on the proposed project “atmospheric circulation of brown dwarfs” over the past year contains two parts. First is the remaining part of the year-1 project – the effects of latent heating on atmospheres of brown dwarfs. Using numerical simulations and a simple analytical scaling theory, we proposed that the fractional coverage area of storms gets smaller as the spectral type goes through the L/T transition. This provides a mechanism for cloud breaking, which is a hypothesis to explain properties of the L/T transition. This work has been presented in several conferences. We have written up a solid draft about these results, and we expect to submit a paper in March. Second is the development of an updated general circulation model (GCM) for the next phase of my project. The new model includes a band-gray radiative transfer scheme that can treat multiple scattering by cloud particles, a hydrological cycle scheme with simple cloud formation and precipitation, convective adjustment schemes for both dry and moist convection, and finally a parameterization of convective perturbations. Almost all components (except for the moist convection scheme) have been carefully and extensively tested and behave correctly as expected. In the coming year, we will run a series of simulations in a wide range of parameter space using the new model to characterize the global circulation patterns of brown dwarfs. By carefully analyzing the results, we will be able to investigate the bright- ness variability of brown dwarfs caused by evolution of cloud structures and properties of cloud distributions around the L/T transition of brown dwarfs.