Energy is never lost it can only change forms. Picture kinetic energy and potential energy as each being on the different side of an equation: 1- kinetic energy = potential energy OR 1 - potential energy = kinetic energy where '1' just represents the total as opposed to a true value. As you increase potential energy, kinetic energy is reduced by the same amount and vice versa. Thus, if you add the amount of change from both sides together, they equal 0.