#1 Whisk cream cheese, milk and 1/2 tsp. vanilla in medium bowl until blended. Add powdered sugar mix well. #2 Bring water, butter and granulated sugar to boil in medium saucepan on medium-high heat. Add flour cook and stir on medium heat 1 min. or until mixture pulls away from side of pan. Remove from heat. Add eggs, 1 at a time, beating with mixer after each until blended. Beat in remaining vanilla. Spoon dough into pastry bag fitted with large star tip. #3 Heat oil in deep fryer on medium heat to 350º F. Pipe dough into 3-inch ring over slotted spatula. Carefully slide dough, in batches, into hot oil using knife to help release dough from spatula cook 4 min. on each side or until golden brown on both sides. Remove from oil with spatula drain on paper towels. Cool 5 min. #4 Dip tops of donuts in cream cheese mixture sprinkle with coconut.