When you exercise and/or are on a diet, how does the weight you lose physically leave your body? Is it through defecation, or do you actually burn it somehow?
This is the end result of a fairly complex system of interactions in the body.
Your fat cell population is usually defined by adolescence/puberty, and remains relatively stable throughout your life. The size will vary.
When your body needs more energy from fat storage, it releases fat from the cells in the form of triglycerides. The body converts these (somewhat inefficiently) into usable energy forms (glucose). The end products from this conversion cycle are mostly carbon dioxide, water and the aforementioned energy.
Most of the CO2 is exhaled, and the same for the water, along with sweat, urine, saliva, etc. So essentially, you are spending some of the fat to drive the conversion process, the conversion process produces energy which is used by the body, and the majority of the rest is exhaled, which is how "fat" leaves the body. A little is excreted or used for cooling (sweat), and the rest is either reabsorbed or serves another purpose in the body.
Excess glucose is transformed into a carbohydrate, glycogen, and packed into temporary stores in muscle tissue and in your liver. As your glycogen stores get filled, your body transforms the additional excess glucose into triglycerides and stores it in fat cells that are distributed throughout your body under your skin and in a fatty sheath of tissue that hangs off your stomach called the omentum.
Energy Use (basically the reversed process of storing energy)
When cells need energy, they generally use glucose in your blood. As your glucose levels get low, your body taps your temporary glycogen stores and also extracts triglycerides from your fat cells.
Source: https://www.livestrong.com/article/420965-does-coconut-oil-make-you-fat-or-lose-weight/ (first thing I found on Google, next time please use Google before asking such a simple question)