Rave Reviews Coconut Cake

1 (18.25 ounce) box yellow cake mix
1 small box Jell-O Brand vanilla flavor instant pudding and pie filling
1 1/3 cup water
4 eggs
1/4 cup vegetable oil
2 cup Baker's Angel Flake coconut
1 cup chopped walnuts or pecans

Blend cake mix, pudding mix, water, eggs and oil in large mixer bowl. Beat at medium speed of electric mixer 4 minutes. Stir in coconut and walnuts. Pour into 3 greased and floured 9-inch layer pans. Bake at 350 degrees F for 35 minutes. Cool in pans 15 minutes; remove and cool on rack. Fill and frost with coconut cream cheese frosting.

Coconut-Cream Cheese Frosting:
4 tablespoons butter or margarine
2 cups Baker's Angel Flake coconut
8 ounces cream cheese
2 teaspoons milk
3 1/2 cups sifted confectioners' sugar
1/2 teaspoon vanilla extract

Melt 2 tablespoons butter in skillet. Add coconut; stir constantly over low heat until golden brown. Spread coconut on absorbent paper to cool. Cream 2 tablespoons butter with cream cheese. Add milk and sugar alternately, beating well. Add vanilla extract; stir in 1 3/4 cups of the coconut. Spread on tops and sides of cake layers. Sprinkle with remaining coconut.