The PMN's seen here are in alveoli, indicative of an acute bronchopneumonia of the lung. The PMN's form an exudate in the alveoli. The alveolar wall capillaries are dilated and distended with RBCs. This patient had a "productive" cough because large amounts of purulent sputum were produced. The source, the neutrophilic alveolar exudate, is seen here.