The application_end event primarily fires when the IIS pool is recycled or the application itself is unloaded. One other thing to note, that a change to a dependent file (say web.config) will cause the application to reload itself, which will in cause the application_end event to fire while it is closing itself off.
To note, the only instance I found of the application end event firing when the last user session times out is in some old documentation dated 2001. I’m not sure if that criteria still applies.