SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934. For the fiscal year ended December 31, 1998 or

[_] Transition Report Pursuant to Section 12 or 15(d) of the Securities
Exchange Act of 1934. For the transition period from to .

Commission file number 0-15903

Calgon Carbon Corporation
(Exact name of registrant as specified in its charter)

Delaware 25-0530110
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

400 Calgon Carbon Drive 15205
Pittsburgh, Pennsylvania (Zip Code)
(Address of principal executive
offices)

Registrant's telephone number, including area code: (412) 787-6700

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

Title of each class Name of each exchange on which registered
-------------------- -----------------------------------------

Common Stock, par value $0.01 per New York Stock Exchange
share

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

None
(Title of class)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [_]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [_]

As of March 5, 1999, there were outstanding 38,723,460 shares of Common Stock,
par value of $0.01 per share.

The aggregate market value of the voting stock held by non-affiliates as of
March 5, 1999 was $199,280,228. The following documents have been incorporated
by reference:

Form 10-K
Document Part Number
--------- -----------

Portions of Annual Report to Stockholders for the Year Ended
December 31, 1998................................................ II and IV
Proxy Statement filed pursuant to Regulation 14A in connection
with registrant's Annual Meeting of Stockholders to be held on
April 20, 1999................................................... III

INDEX

PART I
Item 1. Business.................................................... 1
Item 2. Properties.................................................. 9
Item 3. Legal Proceedings........................................... 10
Item 4. Submission of Matters to a Vote of Security Holders......... 11

PART II
Market for Registrant's Common Equity and Related
Item 5. Stockholder Matters......................................... 11
Item 6. Selected Financial Data..................................... 12
Item 7. Management's Discussion and Analysis........................ 12
Item 8. Financial Statements and Supplementary Data................. 12
Item 9. Disagreements with Accountants.............................. 12

PART III
Item 10. Directors and Executive Officers of the Registrant.......... 12
Item 11. Executive Compensation...................................... 12
Item 12. Security Ownership of Certain Beneficial Owners and
Management.................................................. 12
Item 13. Certain Relationships and Related Transactions.............. 12

PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form
8-K......................................................... 13

SIGNATURES............................................................... 15

PART I

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.

The statements contained in this Annual Report on Form 10-K, specifically
those contained in Item 1 "Business" and Item 7 "Management's Discussion and
Analysis" and statements incorporated by reference into this Form 10-K from
the 1998 Annual Report to Stockholders along with statements in other reports
filed with the Securities and Exchange Commission, external documents and oral
presentations, which are not historical are "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. These
forward-looking statements represent Calgon Carbon Corporation's (the
"Company's") present expectations or beliefs concerning future events. The
Company cautions that such statements are qualified by important factors that
could cause actual results to differ materially from those in the forward-
looking statements. Those factors which specifically relate to the Company's
business include the following: worldwide economy, competition, worldwide
environmental and drinking water regulations, weather conditions, customers'
growth, productivity improvements at its locations, and new technologies that
could affect the use of the Company's products.

Item 1. Business:

The Company:

The predecessor of the Company's activated carbon business was formed in
1942. In April 1985, the Company's predecessor business was purchased by its
management in a leveraged buyout. On June 9, 1987, the Company completed its
initial public offering of common stock. In May 1988, the Company acquired an
activated carbon and charcoal business which provided the Company with two
additional manufacturing facilities located in Germany. The acquisition was
accounted for as a purchase. In September 1990, the Company purchased the
assets of TMPC, Inc. (Vara International) in order to strengthen its vapor
phase and solvent recovery equipment business. This business uses principally
activated carbon as its adsorption media. During the fourth quarter 1994, it
was decided to close one of the German plants due to high operating costs. In
accordance with the plan, the Brilon Wald plant was closed during 1995. In
February 1996, the Company acquired the business and operating assets of the
Perox-Pure(TM) operations of Vulcan Peroxidation Systems, Inc. and in June
1996 also acquired the common stock of Solarchem Enterprises, Inc. to form the
Company's Advanced Oxidation Technologies unit. Both of these transactions
were accounted for as purchases and provided the Company with an entry into
the advanced oxidative water treatment market using ultraviolet light (UV)
technology. In December 1996, the Company acquired the common stock of
Charcoal Cloth (International) Limited and Charcoal Cloth Limited. This
acquisition was also accounted for as a purchase. The acquired companies
produce activated carbon in cloth form primarily for odor control in medical
and industrial applications where granular activated carbon is not feasible.
These products also exhibit electrical properties which make them useful in
applications other than those in which other forms of activated carbon are
utilized. Also in December 1996, the Company purchased the common stock of
Advanced Separation Technologies Incorporated. This Company designs and
assembles proprietary separation equipment for use in the industrial process
and environmental markets utilizing ion exchange and chromatographic
separation technologies. During the fourth quarter of 1997, the Company
initiated a plan to consolidate the manufacturing operations and research
activities of its Advanced Oxidation Technologies unit in Tucson, Arizona into
its Markham, Ontario, Canada site. During the fourth quarter of 1998, the
Company essentially concluded the 1994 decision to close the Brilon Wald,
Germany, plant by transferring ownership of the facility to the local
community.

The Company's operations are principally conducted in two business segments.
Both segments include the production, design and marketing of products and
services specifically developed for the purification, separation and
concentration of liquids and gases. One segment, Activated Carbon, relies on
activated carbon as a base material, while, the other, Engineered Systems,
relies on a variety of other methods and materials which do not involve
activated carbon. The Activated Carbon segment is represented by business
activities using activated carbon while the Engineered Systems segment
generates revenues utilizing UV, ion exchange, and chromatographic separation
technologies.

Products and Services:

The Company's two segments both design and market products and services
specifically developed for the purification, separation and concentration of
liquids and gases. The Activated Carbon segment utilizes activated carbon
while the Engineered Systems segment relies on other technologies.

The Activated Carbon segment's activities consist of four areas: (1)
carbon--the production and sale of a broad range of untreated, impregnated or
acid washed carbons, in either powdered, granular, pellet or cloth form; (2)
services--the provision of carbon reactivation, handling and transportation,
and on-site purification, separation and concentration services; (3) carbon
equipment--the design, assembly and sale of systems that employ activated
carbon for purification, separation or concentration; and (4) charcoal--the
production and sale of charcoal to consumer markets in Germany.

Carbon. The principal product is activated carbon. Activated carbon is a
porous material that removes organic compounds from liquids and gases by a
process known as "adsorption." In "adsorption" organic molecules contained in
a liquid or gas are attracted and bound to the surface of the pores of the
activated carbon as the liquid or gas is passed through it. The Company also
has a patented manufacturing process which enhances the catalytic
functionality of activated carbon, expanding its capability to remove
inorganic compounds; the product was introduced in 1994 and is called
Centaur(R).

The primary raw material used in the production of activated carbons is
bituminous coal which is crushed, mixed with pitch, sized and processed in low
temperature bakers followed by high temperature furnaces. This heating process
is known as "activation" and develops the pore structure of the carbon.
Through adjustments in the "activation" process, pores of the required size
for a particular purification application are developed. The Company's
technological expertise in adjusting the pore structure in the activation
process has been one of the factors that has enabled the Company to develop
many special types of activated carbon. Currently, the Company offers many
types of activated carbon with most available in several particle sizes. The
Company also produces activated carbon in cloth form, using rayon as the
primary raw material. The Company also markets other activated carbons
including products based on coconut or wood which it purchases from
independent suppliers.

Activated carbons are produced in granular, pellet, powdered and cloth
forms, although the Company has historically concentrated on granular and
pelletized activated carbon. The Company manufactures powdered activated
carbon as a by-product and/or by crushing granular activated carbons. Granular
activated carbon is generally used in fixed filter beds for continuous flow
purification processes, while powdered activated carbon is generally used in
batch purification processes. Use of fixed filter beds of activated carbon for
continuous flow processing of a liquid or gas achieves a lower cost of
operation and avoids the disposal costs associated with powdered carbon.

Once activated carbon is saturated with organic materials and can no longer
adsorb any additional organic compounds, its adsorption capacity can be
restored by "reactivation." Reactivation is a process by which the organic
compounds are driven off activated carbon particles by passing the spent
activated carbon through a high temperature furnace. Granular activated carbon
is employed in reactivation applications for economic reasons or to destroy
hazardous adsorbed organic compounds.

Service. The principal service sold is the Calgon Carbon Service(TM) which
supplies customers with a complete wastewater treatment service, particularly
suited for treating wastewater containing hazardous organic chemicals at the
customer's facility. The service is based primarily on reactivation of spent
carbon and transportation of activated carbon to and from the reactivation
facility, but also includes feasibility testing, process design, on-site
equipment, initial activated carbon supply, performance monitoring and major
maintenance of Company-owned equipment. The Company also provides a number of
service packages which include two or more elements of the complete service.
Services are provided under contract at a fixed minimum monthly fee subject to
additional charges for increased carbon usage. The Company provides services
in packages ranging from a fifty-five-gallon drum to truckload quantities.

The Company also offers services to clean water from contaminated aquifers
and surface impoundments and to clean accidental spills on a fee basis. The
Company maintains an inventory of mobile adsorption

equipment which can be dispatched on twenty-four hours notice and can be
operational within forty-eight hours after arrival on site.

Purification services provided by the Company are used to improve the
quality of food, chemical, pharmaceutical and petrochemical products. Such
services may be utilized in permanent installations or in temporary
applications, as pilot studies for new manufacturing processes or recovery of
off-specification products.

The Company also provides custom reactivation services, primarily in Europe.
As part of this service, the Company picks up spent carbon at a customer's
site, transports it to the Company's reactivation facilities, reactivates it
and then returns the same carbon to the customer.

Carbon Equipment. In 1978, the Company began marketing equipment which
employs activated carbon in various purification, separation and concentration
processes, as a means for expanding the market for its products and for
revenue growth. In 1990, the Company acquired Vara International, a solvent
recovery and vapor phase equipment company.

The Company sells a line of adsorption and filtration equipment to clean
water from contaminated aquifers, industrial wastewater and surface
impoundments, to eliminate odors from municipal wastewater plants and other
equipment to purify gases and liquids in industrial process applications.
Equipment for these applications can be custom designed and fabricated for a
specific project or can be drawn from the Company's inventory. The adsorption
equipment product line varies in size from fifty-five-gallon to twelve-foot-
diameter vessels. Through its Vara International unit, the Company sells
customized engineered systems for solvent recovery and volatile organic
compound abatement. The technologies provided include steam regenerable fixed
bed adsorption, distillation, and continuous solvent recovery and abatement of
volatile organic compounds with a new product (Revolver(R) CADRE).

Charcoal and Liquids. Charcoal is manufactured in Germany and used for
barbecue grilling by consumers and restaurants. In addition, the Company
recovers organic acids distilled from wood as a by-product of charcoal
production for retail and industrial markets in Europe.

The following table details total net sales for the Activated Carbon segment
in the past three years:

1998 1997 1996
------------------- ------------------- -------------------
Percentage Percentage Percentage
(Dollars in thousands) Amount of Total Amount of Total Amount of Total
- ---------------------- -------- ---------- -------- ---------- -------- ----------

Carbon.................. $153,584 55% $167,512 56% $163,302 58%
Service................. 85,475 31 86,945 29 80,219 28
Carbon equipment........ 20,009 7 24,875 8 19,222 7
Charcoal and liquids.... 19,387 7 20,315 7 20,795 7
-------- --- -------- --- -------- ---
Total net sales....... $278,455 100% $299,647 100% $283,538 100%
======== === ======== === ======== ===

The Company's Engineered Systems segment designs and markets systems that
employ ultraviolet light (UV) technology alone or in conjunction with hydrogen
peroxide and/or other oxidizing agents, to destroy waterborne organic
contaminants. The Company also sells UV disinfection equipment to the
municipal drinking water and wastewater markets. Through its wholly owned
subsidiary, Advanced Separation Technologies Incorporated (AST), the Company
designs and markets proprietary ISEP(R) (Ionic Separator) continuous ion
exchange units for separation of organics and inorganic compounds, principally
for process applications in the food, pharmaceutical and biotechnology
industries and for nitrate and perchlorate removal from drinking water. AST
also designs and markets CSEP(R) (Chromatographic Separator), a continuous
chromatography separation system for applications in food, pharmaceutical and
fine chemicals market segments.

The following table details total net sales for the Engineered Systems
segment in the past three years:

1998 1997 1996
------------------ ------------------ -----------------
Percentage Percentage Percentage
(Dollars in thousands) Amount of Total Amount of Total Amount of Total
- ---------------------- ------- ---------- ------- ---------- ------ ----------

Advanced Oxidation
Technologies........... $ 8,051 36% $ 7,631 27% $6,658 100%
Advanced Separation
Technologies........... 14,534 64 20,222 73 -- --
------- --- ------- --- ------ ---
Total net sales....... $22,585 100% $27,853 100% $6,658 100%
======= === ======= === ====== ===

Markets:

The Company offers its carbon, service, carbon equipment, UV, ion exchange,
and chromatographic separation systems to the Industrial Process and
Environmental markets. Industrial process applications for the Company's
products and services include purification, catalysis and product recovery
within the food, chemical, pharmaceutical, biotechnology, medical, personnel
protection, cigarette and precious metals industries. Environmental
applications include drinking water purification, municipal wastewater and
sewage treatment, groundwater remediation and emissions control in both
industrial and municipal markets. Charcoal products are used primarily in
Germany for barbecue grilling. The following table details total net sales by
market for the past three years.

Industrial Process
Market:
Food.................. $ 49,393 16% $ 54,148 17% $ 40,759 14%
Chemical and
pharmaceutical....... 22,662 8 24,786 8 21,881 7
Original equipment
manufacturers........ 54,032 18 50,430 15 45,030 16
Other................. 25,734 8 27,666 8 28,525 10
-------- --- -------- --- -------- ---
Subtotal............ 151,821 50 157,030 48 136,195 47
-------- --- -------- --- -------- ---
Environmental Market:
Municipal............. 57,773 19 72,250 22 58,810 20
Industrial............ 72,059 24 77,905 24 74,396 26
-------- --- -------- --- -------- ---
Subtotal............ 129,832 43 150,155 46 133,206 46
-------- --- -------- --- -------- ---
Consumer Market:........ 19,387 7 20,315 6 20,795 7
-------- --- -------- --- -------- ---
Total net sales....... $301,040 100% $327,500 100% $290,196 100%
======== === ======== === ======== ===

Industrial Process Market:

The Industrial Process Market consists of customers that use the Company's
products either for purification, separation or concentration of their
products in the manufacturing process or for direct incorporation into their
product. The Industrial Process Market includes four significant sub-markets:
the food market, the chemical and pharmaceutical market, the original
equipment manufacturers market and a group of other sub-markets.

Food Market. Sweetener manufacturers are the principal purchasers of the
Company's products in the industrial process market. In terms of revenue, the
Company is the major supplier of activated carbons used in the purification of
dextrose and high fructose corn syrup. Activated carbons are also sold for use
in the purification of cane sugar. Ion exchange systems are also used in this
market.

Other food processing applications include decolorization of monosodium
glutamate and purification of citric acid, artificial sweeteners, soya oils,
protein hydrolysates and wine and spirits; process water treatment in the
beverage industry; and decaffeination of coffee utilizing the water process.

Chemical and Pharmaceutical Market. The Company sells a wide range of
activated carbons to the chemical and pharmaceutical market for the
purification of organic and inorganic chemicals, by-product recovery, gas
treatment and catalysis. Applications of these activated carbons include
decolorization of

hydrochloric acid, purification of soda ash, glycerine, analgesics,
antibiotics and vitamins and removal of trace impurities from neon, carbon
dioxide, acetylene and hydrogen. Systems that employ ion exchange technology
contribute to sales within this market.

Original Equipment Manufacturers Market. Manufacturers of various types of
equipment purchase activated carbons for incorporation in such equipment. The
Company is the sole supplier of activated carbons to manufacturers of gas
masks and filters used by the United States military and is a major supplier
of activated carbons to manufacturers of such products used by the European
military. The Company sells activated carbons for use in protective
respirators and collective filters for both private industry and the military.
Other purchasers in the market include manufacturers of home water filters,
spill cleanup equipment, commercial and residential water filters, solvent
recovery equipment and gasoline vapor recovery equipment.

Other Markets. The Company sells its products to a number of additional
industrial process markets. Petroleum refining and petrochemical processing
industries use activated carbons for the removal of sulfur compounds from
natural gas, amine purification and spirits decolorization. The liquefied
natural gas industry uses activated carbons to remove mercury compounds which
would otherwise corrode process equipment. Cigarette manufacturers use
activated carbons in charcoal filters and precious metals producers use
activated carbons to recover gold and silver from low grade ore.

Environmental Market:

The Environmental Market consists of customers that use the Company's
products to control air and water pollutants. The Environmental Market has two
sub-markets, the municipal market and the industrial market.

Municipal Market. The Company sells activated carbons, carbon equipment and
services to municipal customers in connection with the treatment of potable
water to remove pesticides and other dissolved organic material to meet
current regulations and to remove tastes and odors to make the water
aesthetically acceptable to the public. The Company sells primarily granular
activated carbon products to this market and in many cases the granular carbon
functions both as the primary filtration media as well as an adsorption media
to remove the contaminants from the water. In addition, the Company sells UV
systems for the destruction or inactivation of waterborne contaminants.

Municipal sewage treatment plants purchase the Company's odor control
systems and activated carbon products to remove objectionable odors emanating
from the plant and to treat the wastewater to meet operating requirements.
Granular activated carbon is used in odor control applications but both
granular and powdered activated carbons are used to treat wastewater. The
granular activated carbon is used as a filtration/adsorption medium and the
powdered activated carbon is used to enhance the performance of existing
biological waste treatment processes.

Industrial Market. The Company offers its products and services to private
industry to meet wastewater discharge requirements imposed by various
governmental entities. Most of the Company's sales to this market are sales of
the Calgon Carbon Service(TM) for wastewater treatment. The reactivation
portion of this service is an important element if the contaminants in the
wastewater are hazardous organic chemicals. The hazardous organic chemicals
which are adsorbed from the water by the activated carbons are decomposed at
the high temperatures of the reactivation furnace and thereby removed from the
environment. Reactivation saves customers the difficulty of having to find a
method of long-term containment (such as a landfill) for hazardous organic
chemicals removed from their industrial wastewater.

The cleanup of contaminated groundwater, surface impoundments and accidental
spills comprise a significant market for the Company. The Company provides
emergency and temporary cleanup services for public and private entities.

Activated carbon is also used in the chemical, pharmaceutical and refining
industry for purification of air discharges to remove contaminants such as
benzene, toluene and other volatile organics. The Company offers carbon,
services and carbon equipment for these applications.

Consumer Market:

The Consumer Market consists of sales of charcoal (Grillis(R) and Der
Sommer-Hit(R)) for outdoor barbecue grilling. The Company's charcoal is sold
principally in Germany. This market is weather dependent, with the majority of
the sales in the spring and summer months.

Sales and Marketing:

The Company sells carbon, service, carbon equipment, and engineered systems
throughout the world and in Germany sells charcoal. In areas outside of the
United States and Europe, the Company's primary activity is the sale of
activated carbons. Approximately 88% of its products and services are sold
through its direct sales force, while 12% is through agents and distributors.

The Company has a direct sales force in the United States for its Activated
Carbon segment with offices located in Pittsburgh, Pennsylvania; Richmond,
California; Vero Beach, Florida; Houston, Texas; and Bridgewater, New Jersey.
The Company conducts activated carbon related sales in Canada through a
distributor under direction of its wholly owned subsidiary. The Company also
has a sales office in Markham, Ontario, Canada, which sells UV-based systems
and a sales office in Lakeland, Florida through which it markets ion exchange
and chromatographic separation systems. The Company maintains an office in
Singapore to manage its business in South East Asia, including Malaysia,
Thailand, Indonesia, India, Singapore and Oceana.

In 1997, the Company established a subsidiary in Singapore to oversee all
activities in Asia. A representative office was established in Tokyo, Japan to
manage its business in Korea, Taiwan and the People's Republic of China. Sales
of the Company's products in Japan are conducted exclusively by Calgon Far
East Co. Ltd., a joint venture in which the Company is a 60% participant. The
joint venture purchases the Company's products for resale in Japan. The joint
venture also owns and operates a reactivation facility in Fukui, Fukui
Prefecture, Japan and sells related services. Sales to the joint venture have
not been a significant portion of the Company's total net sales.

In Europe the Company has sales offices in Brussels, Belgium; Paris, France;
Manchester, England; and Frankfurt, Germany. The Company also has a network of
agents and distributors that conduct sales in certain countries in Europe, the
Middle East, Africa, Latin America, the Far East, Australia and New Zealand.

All offices can play a role in sales of products or services from either of
the Company's segments.

The following table details total net sales to customers by geographic areas
in the past three years:

United States........... $162,481 54% $173,858 53% $165,671 57%
Europe.................. 87,394 29 102,925 31 94,065 32
Other................... 51,165 17 50,717 16 30,460 11
-------- --- -------- --- -------- ---
Total net sales....... $301,040 100% $327,500 100% $290,196 100%
======== === ======== === ======== ===

Refer to Note 18 to the Consolidated Financial Statements for a discussion of
other financial information classified by major countries in which the Company
operates.

The Company's products and services were purchased by approximately 4,000
active customers in 1998. Over the past three years, no single customer
accounted for more than 10% of the total sales of the Company in any year.

Competition:

The Company has two principal competitors with respect to the production and
sale of carbon related products: Norit, N.V., a Dutch company; and Westvaco
Corporation, a United States company. Chinese producers of coal-based
activated carbon and certain East Asian producers of coconut-based activated
carbon participate in the market on a worldwide basis and sell principally
through resellers. Competition in activated carbons, carbon equipment and
services is based both on price and performance. Other sources of competition
for the Company's activated carbon services and systems are purification,
filtration and extraction processes that do not employ activated carbons.

A number of other smaller competitors engage in the production and sale of
activated carbons in the United States and throughout the world. These
companies compete with the Company in the sale of specific types of activated
carbons, but do not generally compete with the Company in the worldwide
activated carbon business.

In the United States and Europe the Company also competes with several small
regional companies for the sale of its reactivation services and carbon
equipment.

In North America, the Company has competition for its UV technology product
line from products not involving UV technology and from a number of smaller
firms offering some form of advanced oxidation. In Europe, competition comes
primarily from manufacturers of ozone generation equipment, principally
Ozonia, a division of Lyonnaise des Eaux, Trailigaz, a subsidiary of Compagnie
Generale des Eaux and Wedeco, a German-based supplier of ozone and
ozone/ultraviolet based systems.

In the ion exchange market, competitors range from a few large companies
such as U.S. Filter and Applexion to hundreds of small local companies, with a
few competitors providing a full range of filtration/separation equipment,
technologies and service.

There are a number of competitors in the consumer charcoal market whose
production facilities are located in Eastern European countries, Spain,
Portugal, South Africa and South America. These competitors offer inexpensive,
low-quality products to the market.

Capital Expenditures:

In 1998, the Company invested $19.4 million for capital expenditures. Of
that amount, $18.8 million were related to the Activated Carbon segment. The
Company's 1999 capital expenditure budget approximates $19.0 million and is to
include carbon production capacity increases for select products within the
United States and in Europe, domestic service customer capital and the
remainder of the costs associated with new computer hardware and software to
operate the Company's corporate-wide business system. The Company believes
that the funds generated from operations, supplemented as necessary with funds
from lines of credit and its cash reserves, will provide sufficient funds
required for such capital expenditures.

Raw Materials:

The principal raw material purchased by the Company for its Activated Carbon
segment is bituminous coal from mines in the Appalachian Region and mines
outside the United States, under both long-term and annual supply contracts.
The Company purchases the coal used in its Belgian production facility from a
number of coal companies throughout the world under similar arrangements. The
Company purchases beech wood for its German charcoal operations through long-
term contracts and on the open market, primarily waste slabs from saw mills or
as off-cuts from the furniture industry. Most of the wood is sourced in
Germany and the supply of wood is adequate.

The Company purchases significant amounts of natural gas from various
suppliers for use in its Activated Carbon segment's production facilities. In
both the United States and Europe, this natural gas is purchased pursuant to
various annual contracts with natural gas companies.

The Company purchases hydrogen peroxide via long-term fixed-price contracts
for its UV Technologies business.

The only other raw material that is purchased by the Company in significant
quantities is pitch, which is used as a binder in the carbon manufacturing
process. The Company purchases pitch from various suppliers in the United
States and Europe under annual supply contracts.

The purchase of key equipment components for both segments is coordinated
through agreements with various suppliers.

The Company does not presently anticipate any problems in obtaining adequate
supplies of any of its raw materials.

Research and Development:

The Company's research and development activities are conducted primarily at
a research center near Pittsburgh, Pennsylvania, under the direction of a
Senior Vice President with a staff of 53 employees. A pilot plant located near
Pittsburgh is used for the production of experimental activated carbon,
activated charcoal cloth products, and equipment for testing and applications
development. Experimental systems are also designed and evaluated at this
location.

The principal goals of the Company's research program are maintaining the
Company as a technological leader in the production and sales of its products,
services and equipment; developing new products and services; and providing
technical support to the manufacturing and marketing operations of the Company
with specific focus on advanced oxidation and separation applications and
charcoal cloth utilization.

The Company's research programs include new and improved methods for
manufacturing and utilizing improved activated carbons for applications such
as physical adsorbents and adsorptive catalysts. Emerging
purification/separation/ concentration technologies are rigorously evaluated.
The Centaur(R) product line represents a family of activated carbons developed
for adsorptive/catalytic applications and the charcoal cloth line is the first
commercial entry into the shaped carbon business.

Research and development expenses were $8.4 million, $8.3 million and $6.5
million in 1998, 1997 and 1996, respectively.

Patent and Trade Secrets:

The Company possesses a substantial body of technical knowledge and trade
secrets and owns 83 United States patents and 142 patents in other countries.
The technology embodied in these patents, trade secrets and technical
knowledge applies to all phases of the Company's business including production
processes, product formulations and application engineering. The Company
considers this body of technology important to the conduct of its business,
although it considers no individual item material to its business.

Regulatory Matters:

Domestic. The Company is subject to extensive environmental laws and
regulations concerning emissions to the air, discharges to waterways and the
generation, handling, storage, transportation, treatment and disposal of waste
materials and is also subject to other federal and state laws regarding health
and safety matters. The Company believes it is presently in substantial
compliance with these laws and regulations. These laws and regulations are
constantly evolving, and it is impossible to predict the effect these laws and
regulations may have on the Company in the future.

The Environmental Protection Agency (EPA) has issued certain regulations
under the Resource Conservation and Recovery Act (RCRA) dealing with the
transportation, storage and treatment of hazardous waste that impact the
Company in its carbon reactivation services. Once activated carbon supplied to
a customer can no longer adsorb contaminating organic substances, it is
returned to the Company's facilities for reactivation and subsequent reuse. If
the substance(s) adsorbed by the spent carbon is (are) considered hazardous,
under these EPA regulations the activated carbon used in the treatment process
is also considered hazardous. Therefore, a permit is required to transport the
hazardous carbon to the Company's facility for reactivation. The Company

possesses the necessary federal and state permits to transport hazardous
waste. Once at the Company's reactivation site, the hazardous spent activated
carbon is placed in temporary storage tanks. Under the EPA regulations, the
Company is required to have a hazardous waste storage permit. The Company has
obtained RCRA Part B permits to store hazardous waste at its Pittsburgh and
Catlettsburg facilities. The process of reactivating the spent activated
carbon, which destroys the hazardous organic substances, is subject to
permitting as a thermal treatment unit under RCRA. The Company does not accept
for reactivation carbons containing certain hazardous materials, including
PCBs, dioxins and radioactive materials.

Each of the Company's domestic production facilities has permits and
licenses regulating air emissions and water discharges. All of the Company's
domestic production facilities are controlled under permits issued by state
and federal air pollution control entities. The Company is presently in
substantial compliance with these permits. Continued compliance will require
administrative control and will be subject to any new or additional standards.

Europe. The Company is also subject to various environmental health and
safety laws and regulations at its facilities in Belgium, England and Germany.
These laws and regulations address substantially the same issues as those
applicable to the Company in the United States. The Company believes it is
presently in substantial compliance with these laws and regulations.

Indemnification. The Company has a limited indemnification agreement with
the previous owner of the Company which will fund certain environmental costs
if they are incurred at the Company's Catlettsburg, Kentucky plant. The
Company believes that the amount of the indemnification is sufficient to fund
these liabilities if they arise.

Employee Relations:

As of December 31, 1998, the Company employed 1,195 persons on a full-time
basis, 701 of whom were salaried production, office, supervisory and sales
personnel. The 261 hourly personnel in the United States are represented by
the United Steelworkers of America. The current contracts with the United
Steelworkers of America expire on February 1, 2002 with respect to the
Pittsburgh facility and on June 6, 2001 with respect to the Catlettsburg
facility. The 112 hourly personnel at the Bodenfelde plant in Germany are
represented by the German Chemical Industry Union. Agreements are between the
National Chemical Union and the German Chemical Federation. The current
agreement expires on May 31, 1999. The 71 hourly personnel at the Company's
Belgian facility are represented by two national labor organizations with
contracts expiring on July 31, 1999. The Company has 50 hourly employees at
three non-union United Kingdom facilities (one of which is a customer
location).

Item 2. Properties:

The Company owns nine production facilities, two of which are located in
Pittsburgh, Pennsylvania; and one each in the following locations:
Catlettsburg, Kentucky; Pearlington, Mississippi; Blue Lake, California;
Feluy, Belgium; Grays, England; Bodenfelde, Germany; Fukui, Fukui Prefecture,
Japan. The Company leases three production facilities as follows: Lakeland,
Florida; Markham, Ontario, Canada; Houghton Le Spring, England. During 1998,
the Company essentially concluded its 1994 restructuring plan by transferring
ownership of the Brilon Wald, Germany, plant to the local community. This
plant was shut down in 1995.

The Lakeland, Florida, and Markham, Ontario, Canada, locations are
associated with the Engineered Systems segment and the remaining facilities
produce product for the Activated Carbon segment.

The Catlettsburg, Kentucky plant is the Company's largest facility, with
plant operations occupying approximately 50 acres of a 226-acre site. This
plant produces granular and powdered activated carbons, acid washed granular
activated carbons and reactivates spent granular activated carbons.

The Pittsburgh, Pennsylvania carbon production plant occupies a four-acre
site. Operations at the plant include the reactivation of spent granular
activated carbons, the impregnation of granular activated carbons, the

grinding of granular activated carbons into powdered activated carbons and the
production of pelletized carbons. The plant also has the capacity to produce
coal-based or coconut-based granular activated carbons.

The Pearlington, Mississippi plant occupies a site of approximately 100
acres. The plant has one production line that produces granular activated
carbons and powdered carbons.

The Blue Lake plant, located near the city of Eureka, California occupies
approximately two acres. The primary operation at the plant includes
reactivation of spent granular activated carbons.

The Pittsburgh, Pennsylvania equipment and assembly plant is located
approximately one mile from the carbon production plant and is situated within
a 16-acre site that includes a 300,000 square foot building. The equipment and
assembly plant occupies 95,000 square feet with the remaining space used as a
centralized warehouse for carbon inventory. The plant assembles fully
engineered carbon equipment for purification, concentration and separation
systems.

The Markham, Ontario, Canada assembly facility is housed in a 19,000 square
foot building near Toronto, Ontario, Canada. Assembly of ultraviolet oxidation
equipment takes place at this location. In addition, this facility houses a
testing laboratory and pilot plant operations.

The Lakeland, Florida ion exchange separation equipment plant occupies a
26,400 square foot building on approximately one and a half acres of property.
The primary operations are warehousing and equipment testing.

The Feluy plant occupies a site of approximately 21 acres located 30 miles
south of Brussels, Belgium. It has one production line which manufactures
granular activated carbons. In addition, operations at the plant include the
reactivation of spent granular activated carbons and the grinding of granular
activated carbons into powdered activated carbons.

The Grays plant occupies a three-acre site near London, England. Operations
at the plant include the reactivation of spent granular activated carbons and
the impregnation of granular activated carbon.

The Bodenfelde plant occupies a site of approximately 40 acres and is
situated in the State of Lower Saxony, Germany. Operations at the plant
include the manufacture of charcoal for the consumer market. Also a by-
product, acetic acid of various grades, is produced and sold.

The Houghton Le Spring plant, located near the city of Newcastle, England,
occupies approximately two acres. Operations at the plant include the
manufacture of woven and knitted activated carbon textiles and their
impregnation and lamination.

The Fukui, Fukui Prefecture, Japan plant is owned by Calgon Far East Co.,
Ltd., a joint venture of which the Company is a 60% participant. It occupies a
site of approximately 6 acres and has one production line which reactivates
spent granular activated carbon mainly for water plants. In addition, the
operations at the plant includes acid rinsing for reactivated and virgin
carbons.

The Company believes that the plants are adequate and suitable for its
operating needs.

Item 3. Legal Proceedings:

The Company is a party to an action, Powell Duffryn Terminals, Inc. et al.
v. Calgon Carbon Corporation and Rayonier, Inc. CV 497-080 (U.S.D.C. S.D.
Ga.), filed in April 1997, by Powell Duffryn Terminals, Inc. ("Powell
Duffryn"), and sixteen of its insurance carriers. Plaintiffs seek indemnity,
contribution and damages as a result of a fire and explosion that occurred on
April 10, 1995 at Powell Duffryn's Savannah, Georgia chemical storage
facility. Plaintiffs seek to recover all or part of an amount in excess of $57
million paid to resolve claims by third parties and to remediate Powell
Duffryn's property and adjoining lands as a result of the fire and
approximately $5.5 million allegedly paid by Powell Duffryn's first-party
insurer, Industrial Risk Insurers ("IRI"), for Powell Duffryn's property
damage and business interruption claims.

Plaintiffs contend that the fire was caused as a result of an exothermic
reaction occurring in a Calgon Carbon Corporation VentSorb(R) containing BPL
activated carbon that Powell Duffryn had connected to three tanks containing
flammable Crude Sulfate Turpentine ("CST") in order to control odors.
Plaintiffs contend that the Company failed to warn of the potential for a fire
from the use of VentSorbs containing activated carbon. Plaintiffs also seek to
hold the Company liable for alleged negligent misrepresentation or negligent
dissemination of business information.

On August 26, 1997, Plaintiffs' counsel made a demand for damages under
O.C.G.A. (S)51-12-14 for $35 million which encompassed all claims raised by
Plaintiffs in the action. The Company rejected this demand. The Company has
$40 million in excess third-party insurance coverage.

On April 20, 1998, the United States District Court for Southern District of
Georgia, Savannah Division, granted Calgon Carbon Corporation's Motion for
Summary Judgment and entered judgment for the Company against the Plaintiffs.

On May 4, 1998, the District Court denied Plaintiff's Motion for
Reconsideration. Plaintiffs appealed the grant of the summary judgment and
entry of judgment to the United States Court of Appeals for the Eleventh
Circuit.

On March 10, 1999, the United States Court of Appeals for the Eleventh
Circuit issued a PER CURIAM opinion affirming the decision of United States
District Court for the Southern District of Georgia, Savannah Division, which
granted the Company's motion for summary judgment and entered judgment for
Company against plaintiff. The plaintiffs have twenty-one (21) days to file a
petition for reconsideration of the decision of the U.S. Court of Appeals for
the Eleventh Circuit.
---------------------

In December 1996, the Company purchased the common stock of Advanced
Separation Technologies Incorporated (AST). This Company designs and assembles
proprietary separation equipment for use in the industrial process and
environmental markets.

During 1997, the Company recognized additional costs, primarily related to
design and mechanical failures on projects which the sellers represented to be
substantially complete as of December 31, 1996. A significant portion of these
costs were related to design and/or other defects on critical components which
the Company believes were known to the AST management and its owners as of
December 31, 1996. The net additional estimated cost incurred and accrued as
of December 31, 1997 on these projects of $9.7 million has been considered as
additional acquisition costs and accordingly goodwill has been increased to
reflect these costs.

On January 12, 1998, the Company filed a claim for unspecified damages in
the United States District Court in the Western District of Pennsylvania
alleging among other things that Progress Capital Holdings and Potomac Capital
Investment Corporation materially breached various AST financial and
operational representations and warranties included in the Stock Purchase
Agreement. Based upon information obtained throughout 1997, the Company
believes that it has a reasonable basis for this claim and intends to
vigorously pursue reimbursement for damages sustained. Neither the Company nor
its counsel can predict with certainty the amount, if any, of recovery that
will be obtained from the defendants in this matter. Accordingly, the Company
has not recorded a receivable for this gain contingency pending further
developments in the litigation.

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

No matters were submitted to a vote of security holders during the fourth
quarter of 1998.

PART II

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

The information required for this Item 5 appears under the caption "Common
Shares and Market Information" on page 42 of the Annual Report to Stockholders
for the Year Ended December 31, 1998 and is incorporated in this Annual Report
by reference.

Item 6. Selected Financial Data:

The information required by this Item 6 appears under the caption "Six-Year
Summary, Selected Financial and Statistical Data" on page 41 of the Annual
Report to Stockholders for the Year Ended December 31, 1998 and is
incorporated in this Annual Report by reference.

Item 7. Management's Discussion and Analysis:

The Discussion and Analysis of Financial Condition required by this Item 7
appears on pages 13 through 17 of the Annual Report to Stockholders for the
Year Ended December 31, 1998 and is incorporated in this Annual Report by
reference.

Item 8. Financial Statements and Supplementary Data:

The financial statements and related report on the consolidated financial
statements of Calgon Carbon Corporation and its subsidiaries for the Years
Ended December 31, 1998, 1997 and 1996 required by this Item 8 appear on pages
19 through 42 of the Annual Report to Stockholders for the Year Ended December
31, 1998 and are incorporated in this Annual Report by reference.

Item 9. Disagreements with Accountants:

None.

PART III

Item 10. Directors and Executive Officers of the Registrant:

Information concerning the directors and executive officers of the
Corporation required by this item is incorporated by reference to the material
appearing under the heading "Election of Directors" in the Company's Proxy
Statement for the 1999 Annual Meeting of its Stockholders.

Item 11. Executive Compensation:

Information required by this item is incorporated by reference to the
material appearing under the heading "Executive Compensation" in the Company's
Proxy Statement for the 1999 Annual Meeting of its Stockholders.

Item 12. Security Ownership of Certain Beneficial Owners and Management:

Information required by this item is incorporated by reference to the
material appearing under the heading "Security Ownership of Management and
Certain Beneficial Owners" in the Company's Proxy Statement for the 1999
Annual Meeting of its Stockholders.

Item 13. Certain Relationships and Related Transactions:

Information required by this item is incorporated by reference to the
material appearing under the heading "Election of Directors" in the Company's
Proxy Statement for the 1999 Annual Meeting of its Stockholders.

PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K:

A. Financial Statements

The following documents are filed as part of this report:

Page(s) in Annual
Report to
Stockholders for
the Year Ended
Financial Statements and Related Report December 31, 1998
--------------------------------------- -----------------

Report of Independent Accountants, dated February 9, 1999................... 18
Consolidated Statement of Income for the Years Ended December 31, 1998,
1997 and 1996.............................................................. 19
Consolidated Balance Sheet as of December 31, 1998 and 1997................. 20
Consolidated Statement of Cash Flows for the Years Ended December 31, 1998,
1997 and 1996.............................................................. 21
Consolidated Statement of Shareholders' Equity for the Years Ended
December 31, 1998, 1997 and 1996........................................... 22
Notes to the Consolidated Financial Statements.............................. 23-40
Quarterly Financial Data--Unaudited......................................... 42

C. Exhibits

Page
----

3.1 Amended Certificate of Incorporation........................ (d)
3.2 By-laws of the Registrant................................... (a)
4.0 Rights Agreement............................................ (f)
9.1 Voting Trust Agreement...................................... (b)
9.2 Voting Trust Certificate of Amendment....................... (c)
10.1* Calgon Carbon Corporation Stock Option Plan, as Amended..... (e)
10.3* Officers Incentive Plan of Calgon Carbon Corporation, as (h)
Amended.....................................................
10.4* 1993 Non-Employee, Directors' Stock Option Plan, as Amended. (g)
21.0 The wholly owned subsidiaries of the Company are Chemviron
Carbon GmbH, a German corporation; Calgon Carbon Canada,
Inc., a Canadian corporation; Chemviron Carbon Ltd., a
United Kingdom corporation; Calgon Carbon Investments Inc.,
a Delaware corporation; Solarchem Environmental Systems
Inc., a Nevada corporation; Charcoal Cloth (International)
Limited, a United Kingdom corporation; Charcoal Cloth
Limited, a United Kingdom corporation; Advanced Separation
Technologies Incorporated, a Florida corporation; and Calgon
Carbon Export Inc., a Barbados corporation. In addition, the
Company owns 60% of Calgon Far East Co. Ltd., a Japanese
corporation.
23.1 Consent of Independent Accountants.......................... (17)

Note: The Registrant hereby undertakes to furnish, upon request of the
Commission, copies of all instruments defining the rights of holders of long-
term debt of the Registrant and its consolidated subsidiaries. The total amount
of securities authorized thereunder does not exceed 10% of the total assets of
the Registrant and its subsidiaries on a consolidated basis.

(d) Incorporated herein by reference to Exhibit 3.1 to the Company's report on
Form 10-K filed for the fiscal year ended December 31, 1990.
(e) Incorporated herein by reference to Exhibit 10.1 to the Company's report
on Form 10-K filed for the fiscal year ended December 31, 1990.
(f) Incorporated herein by reference to Exhibit 4.0 to the Company's report on
Form 8-A dated February 6, 1995.
(g) Incorporated herein by reference to Exhibit 10.4 to material appearing
under the heading of "Executive Compensation" in the Company's Proxy
Statement for the 1999 Annual Meeting of its Stockholders.
(h) Incorporated herein by reference to Exhibit 10.3 to material appearing
under the heading of "Executive Compensation" in the Company's Proxy
Statement for the 1999 Annual Meeting of its Stockholders.
* Executive compensation plans.

D. Reports on Form 8-K

No reports on Form 8-K were filed during the last quarter of the year ended
December 31, 1998.

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.

Calgon Carbon Corporation

March 15, 1999 /s/ Thomas A. McConomy
- ------------------------------------- By: _________________________________
(Date) Thomas A. McConomy
President and Chief Executive
Officer

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

Signature Title Date
--------- ----- ----

/s/ Thomas A. McConomy President, Chief Executive March 15, 1999
______________________________________ Officer, Director,
Thomas A. McConomy Chairman of the Board

/s/ Clarence J. Kenney Interim Chief Financial March 15, 1999
______________________________________ Officer
Clarence J. Kenney

/s/ Robert W. Cruickshank Director March 15, 1999
______________________________________
Robert W. Cruickshank

/s/ Arthur L. Goeschel Director March 15, 1999
______________________________________
Arthur L. Goeschel

/s/ Nick H. Prater Director March 15, 1999
______________________________________
Nick H. Prater

/s/ Seth E. Schofield Director March 15, 1999
______________________________________
Seth E. Schofield

/s/ Harry H. Weil Director March 15, 1999
______________________________________
Harry H. Weil

/s/ Robert L. Yohe Director March 15, 1999
______________________________________
Robert L. Yohe

EXHIBIT INDEX

Exhibit Method of
No. Description Filing
------- ----------- --------------

3.1 Amended Certificate of Incorporation................. (d)
3.2 By-laws of the Registrant............................ (a)
4.0 Rights Agreement..................................... (f)
9.1 Voting Trust Agreement............................... (b)
9.2 Voting Trust Certificate of Amendment................ (c)
10.1* Calgon Carbon Corporation Stock Option Plan, as
Amended.............................................. (e)
10.3* Officers Incentive Plan of Calgon Carbon Corporation,
as Amended........................................... (h)
10.4* 1993 Non-Employee, Directors' Stock Option Plan, as
Amended.............................................. (g)
21.0 The wholly owned subsidiaries of the Company are
Chemviron Carbon GmbH, a German corporation; Calgon
Carbon Canada, Inc., a Canadian corporation;
Chemviron Carbon Ltd., a United Kingdom corporation;
Calgon Carbon Investments Inc., a Delaware
corporation; Solarchem Environmental Systems Inc., a
Nevada corporation; Charcoal Cloth (International)
Limited, a United Kingdom corporation; Charcoal Cloth
Limited, a United Kingdom corporation; Advanced
Separation Technologies Incorporated, a Florida
corporation; and Calgon Carbon Export Inc., a
Barbados corporation. In addition, the Company owns
60% of Calgon Far East Co. Ltd., a Japanese
corporation.......................................... Filed herewith
23.1 Consent of Independent Accountants................... Filed herewith

Note: The Registrant hereby undertakes to furnish, upon request of the
Commission, copies of all instruments defining the rights of holders of long-
term debt of the Registrant and its consolidated subsidiaries. The total
amount of securities authorized thereunder does not exceed 10% of the total
assets of the Registrant and its subsidiaries on a consolidated basis.

(a) Incorporated herein by reference to Exhibit 3.2 to the Company's
registration statement on Form S-1 (File No. 33-13443) effective June 2,
1987.
(b) Incorporated herein by reference to Exhibit 9.1 to the Company's
registration statement on Form S-1 (File No. 33-13443) effective June 2,
1987.
(c) Incorporated herein by reference to Exhibit 9.2 to the Company's report on
Form 10-K filed for the fiscal year ended December 31, 1987.
(d) Incorporated herein by reference to Exhibit 3.1 to the Company's report on
Form 10-K filed for the fiscal year ended December 31, 1990.
(e) Incorporated herein by reference to Exhibit 10.1 to the Company's report
on Form 10-K filed for the fiscal year ended December 31, 1990.
(f) Incorporated herein by reference to Exhibit 4.0 to the Company's report on
Form 8-A dated February 6, 1995.
(g) Incorporated herein by reference to Exhibit 10.4 to the material appearing
under the heading of "Executive Compensation" in the Company's Proxy
Statement for the 1999 Annual Meeting of its Stockholders.
* Executive compensation plans.
(h) Incorporated herein by reference to Exhibit 10.3 to the material appearing
under the heading of "Executive Compensation" in the Company's Proxy
Statement for the 1999 Annual Meeting of its Stockholders.
* Executive compensation plans.