As shown in Fig. 1 , the M-sequence has a zero crosscorrelation between principal peaks, which are responsible for signal recovery from a single rane (within one cycle) —this s-like shape is ideal as far as crosscorrelation properties are concerned.The Al— and A2-sequence exhibits a non-zero crosscorrelation ("corrugation") between the principal peaks, which has been shown to degrade the performance of lidar using this sequence to an unacceptable level in cloudy conditions3 (these minor peaks in the crosscorrelation function introduce clutter — interference due to simultaneous pickup of signal from a range of distances).On the other hand, in certain conditions (see below), the Al- and the A2-sequence yield better noise performance due to their balance property. The demodulation sequence should be balanced also for another reason: to allow for an arbitrary vertical shift in the modulation sequence without affecting the crosscorrelation/signal properties when there are constraints on the values of the laser output power, e.g., due to the physical co-dependence of the output power and wavelength typical of semiconductor lasers (an arbitrary constant becomes zero after demodulation with a balanced sequence). In other words, only with a balanced demodulation sequence are the high and low laser output power levels arbitrary in terms of signal modulation properties; in the M-sequence, for instance, the low level has to be zero to maintain its desirable crosscorrelation/signal properties.