The basic principle of air conditioning comes down to:
"Absorb energy in one place and release it in another place"
The refrigeration system process requires an indoor unit, an outdoor unit and copper piping to connect both.
Through the piping the refrigerant flows from one unit to another. It is the refrigerant that absorbs the energy in one unit and releases it in the other.

Cooling mode
 
1 Indoor unit

A fan blows the hot indoor air over a heat exchanging coil through which cold refrigerant flows. The cold refrigerant absorbs the heat from the air and cooled air is blown into the room

2 Copper piping

The refrigerant circulates through the units and the piping and takes the heat from the indoor unit to the outdoor unit.

3 Outdoor unit

Through compression, the refrigerant gas is heated and its boiling point increases. In the outdoor unit the obtained heat through compression is released to the outdoor air by means of a fan which blows the outdoor air over a heat exchanging coil.

4 Refrigerant

The liquid refrigerant flows back to the indoor unit.

5 Indoor unit

Back in the indoor unit, the refrigerant is decompressed and thus enabled to extract heat form the indoor air.