Apple Final Cut Pro 7 - Manual (Page 211)

A balanced audio cable sends the same audio signal on two wires, but inverts the phase
of one signal by 180 degrees.
Original signal
Inverted signal
(reverse phase)
When noise is introduced into the cable, it is introduced equally to both the original and
the inverted signal.
Noise on line
(affects both signals)
When the signal arrives at its destination, the inverted signal is put back in phase and
both signals are combined. This puts the original and inverted signals back in phase, but
it causes the noise signals on each line to be out of phase.
Inverted signal
(inverted again)
211 Chapter 12 Connecting Professional Video and Audio Equipment